Despite a recent sell-off in the tech sector, shares of several of the world's top cloud companies are still up double digits so far this year, buoyed by continued investor enthusiasm for ai.
Oracle (ORCL) shares have soared 30% since the start of the year, with IBM (IBM) shares rise 19%. amazon (NASDAQ: AMZN) and Google owner Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) have seen a 17% increase in their respective share prices, while Microsoft (NASDAQ: MSFT) Shares rise 11%.
Which brings us to our question of the day for South African investors: Which cloud giant is best positioned to dominate ai?
We asked Seeking Alpha analysts Victor Dergunov, Joe Albano and Ahan Vashi to weigh in on the matter.
Victor Dergunov: There are several “cloud giants” well positioned to dominate their respective areas in ai. Companies that come to mind include Microsoft (MSFT), amazon (AMZN), and Google (GOOG). However, amazon’s AWS may have the most potential and may be the most underrated and underappreciated beneficiary of cloud/ai right now.
Joe Albano: Meta Platforms (NASDAQ: GOAL) in terms of ai from a cloud giant's perspective. It has the resources, open source models, and finances to prove it works. Meta is unstoppable at this point. If it's a purely enterprise/consumer cloud play, it's Microsoft (MSFT) with its ability to leverage OpenAI.
Ahan Vashi: From an enterprise perspective, Microsoft (MSFT) appears to be better positioned when it comes to ai monetization, given its broad enterprise footprint. That said, amazon Web Services (AMZN) is showing impressive growth acceleration; additionally, amazon (AMZN) stock is reasonably priced and offers the best long-term risk/reward ratio among cloud hyperscalers. Alphabet (GOOG) is no slouch either, with a dominant position in digital advertising.
While I expect all three cloud giants to do well in the ai era, the only dominant player in this space is the company that powers them all: Nvidia (NASDAQ:NVDA). In my opinion, Nvidia's DGX Cloud, offered through Azure, AWS, GCP, and OCI, is the future of cloud computing in the ai era, and with over 90% market share, Nvidia (NVDA) already owns the ai GPU market.
