Microsoft Is Stealing Amazon's Cloud Market Share, Analyst Says
Microsoft is eating Amazon's cloud computing lunch.
That's according to one analyst.
"In the September quarter we are seeing a clear acceleration of larger and more strategic enterprise cloud deals (both domestically as well as in Europe) as we believe Redmond is poised to win the lion's share of the next phase of cloud deployments vs.
Amazon," wrote Wedbush Securities analyst Dan Ives in a note out Thursday.
"While AWS remains the leader in cloud, we believe MSFT is starting to clearly "close the gap" as Redmond is seeing an acceleration of spending among enterprises around public/hybrid cloud deployments." The EU is emerging as a growth market for cloud adoption, as recently noted by Stifel analyst Erik Rasmussen.
Microsoft's revenue growth for Azure was 73% year-over-year in its quarter reported in April.
That decelerated only slightly to a 64% rate, a clip investors were largely encouraged by.
As Microsoft and Amazon continue growing their cloud businesses -- and for Amazon, it's becoming a larger portion of its total earnings picture -- the two are locked in a two-horse race to take market share as businesses of all sizes gradually adopt the cloud.
Ives says more than half of enterprises globally will adopt the cloud by 2022.
Microsoft reports earnings on October 23.
In its last two quarters, it beat estimates, seeing both its stock price and price targets from analysts go higher.
The shares are up 35% year-to-date.
Microsoft and Amazon are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.
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