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Amazon.com Inc. (AMZN) Winning the Cloud Wars, Price Target Jumps to $435

Amazon.com (AMZN)

Amazon.com Inc. (NASDAQ:AMZN) has had its price target increased from $370 to $435 by Cowen analyst, John BlackHedge. The increase in the price target comes on the heels of a survey result showing that Amazon was leading in the cloud wars between its AWS, Microsoft’s Azure and Google’s Cloud Platform (GCP) and others.

Amazon.com (AMZN)

In May, a Fortune article reported that Amazon was leading its rivals in the cloud wars. The article has it that Amazon’s AWS has about 10 times the combined capacity of the remaining players in the cloud market. In June Google responded with its own stats to challenge Amazon’s claim to top dog status in the cloud wars.

A post on GCP’s blog revealed that Google Cloud Platform network has the capacity for “100,000 servers to exchange information at 10Gb/s each, enough to read the entire scanned contents of the Library of Congress in less than 1/10th of a second“.

Amazon is Still Top Dog

Google can blow its trumpet from now until eternity about the strength of its GCP but Amazon is still the leader in the cloud space, at least based on third party reports. The result of a survey carried out by Cowen TMT Team has shown that Amazon is leading the pack in the cloud wars.

The Cowen 2015 survey polled 200 public cloud vendors and the market leaders are already obvious. In terms of cloud related budget share, Amazon’s AWS had 27% and Microsoft’s Azure was second with 23%. Microsoft is taking the lead in the overall usage of its cloud platform at 45% slightly higher than Amazon’s AWS 44%.

However, in terms of making money from the cloud, Amazon’s AWS is still the top earner. AWS customers spent an annual average of $124,000, which is above the annual average spends with rival vendors.

The Cloud War is Actually between Amazon and Microsoft

Cowen believes that the cloud war is now between Amazon’s AWS and Microsoft’s Azure, Google is not yet a serious contender in this market. Between Amazon’s AWS and Microsoft’s Azure, Cowen seems to be leaning towards the possibility that Amazon’s AWS will be the ultimate winner.

John Blackledge of Cowen sums of Amazon’s AWS market lead in the statement supporting the raising of his price target. He says, ” Across several key criteria, AWS was the highest-rated Public Cloud vendor as AWS ranked #1 in share of budget, avg. annual spend and expected spending growth and was a close #2 in overall usage (to Azure)”.

Amazon has been trading up nicely in the last one year. The stock has gained 30.93% in the last one year, it has gained 40.72% in the year-to-date period and it has gained 16.64% in the last three months.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.