Amazon (NASDAQ: AMZN) stock rose 3% in the pre-market trading Monday after Mizuho Securities reiterated top pick status.
Mizuho Securities analysts have reaffirmed Amazon (AMZN) stock as their top pick, citing signs of an accelerating sales cycle within the company’s Amazon Web Services (AWS) division. The analysts point to the growth of executive business center (EBC) meetings and early exits of on-premises data center contracts as key drivers behind this positive trend.
Mizuho highlighted that deals within AWS are being finalized more swiftly, with historical data indicating a reduction in the sales cycle from 90 days to just 60 days post-meeting.
Surveys conducted by Mizuho indicate that AWS customers are expediting the termination of on-premise data center contracts through prepayments, signaling a heightened demand for AWS services and an increase in sales cycle velocity.
Mizuho also pointed to Amazon’s budget for fiscal year 2024, which indicates a significant shift toward infrastructure spending. This shift suggests an accelerated migration of workloads to AWS.
The analysts identify two key drivers behind this migration trend: an increasing focus among AWS customers on moving data into the cloud for generative artificial intelligence (AI) deployment over the long term and the optimization of existing cloud data for advanced analytics, such as vectorized or unstructured data warehousing, to support next-generation AI applications.
The forecast from Mizuho indicates a resurgence in consumption levels to historical norms, suggesting a potential surge in AWS spending by 20% year-over-year.
Amazon (NASDAQ: AMZN) Stock Price Action
AMZN stock rose 2.82% to close at $185.07 on Friday. The traders had exchanged hands with 42,196,457 (42.19 million) shares compared to the average daily trading volume of 43.27 million.
