Mizuho reiterates its ‘TOP PICK’ rating for Amazon $AMZN with a price target of $230, highlighting accelerated sales cycles in AWS. They note increased frequency of executive business center (EBC) meetings and earlier termination of on-premises data center contracts, resulting in deals closing 60 days after meetings, compared to the typical 90-day timeframe.
Rationale
– AWS clients are opting to prepay for early termination of on-premises data center contracts, signaling a swifter transition to AWS and an expedited sales process.
– The budget for fiscal year 2024 indicates a shift towards increased infrastructure expenditure, suggesting a faster transition of workloads to AWS.
Factors
– Emphasis on migrating substantial data to the cloud for prolonged utilization in generative AI applications.
– Enhancing current cloud data for optimization in next-generation AI (Gen-AI) processes.
Additionally, Mizuho predicts AWS expenditure to return to previous patterns, projecting a potential year-over-year growth of 20%.
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