Yahoo Finance Amazon (AMZN) Boosts Reach in Canada With Calgary Region
Amazon AMZN continues to dominate the global cloud computing space on the back of an increasing number of availability zones and regions served by Amazon Web Services (“AWS”).
This is evident from AWS’ latest launch of its second infrastructure region in Canada, which is located in Calgary. With this, AMZN marked itself the first cloud services provider in Western Canada.
The AWS Canada West (Calgary) Region comprises three availability zones, which will aid AWS in delivering low latency and offering access to its robust cloud services portfolio and technology, including AI, machine learning, data analytics and the Internet of Things to customers.
The region will allow customers to run critical workloads seamlessly and store data securely in Canada.
Thus, the latest move is expected to enable Amazon to gain traction among various large and small companies in the country.
Some active customers of AWS in the country are Bell Canada, BlackBerry, Calgary Sports and Entertainment, CI Financial, Keyera, Kidoodle.tv, KOHO Financial, Maple Leaf Sports & Entertainment, the National Hockey League, Natural Resources Canada, and the University of Calgary.
The move is part of the company's growing investments in Canada.
AWS intends to invest around $17.9 billion in Canada by 2037 via the new Region and the existing one, AWS Canada (Central) Region, Quebec.
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Increasing Regions & Availability Zones
In addition to AWS Canada West (Calgary) Region, the company announced AWS Local Zones in Toronto and Vancouver.
Apart from North America, AWS’ increasing Regions in Europe remains a plus. The company operates seven AWS Regions and 21 availability zones across Europe in Frankfurt, Ireland, London, Milan, Paris, Stockholm and Zurich.
Also, AWS’ growing interest in the Asia-Pacific region remains noteworthy. It plans to launch an AWS infrastructure region in Malaysia, wherein it strives to invest around $6 billion by 2037 and support job creation in the country.
The company launched a new infrastructure region in Melbourne, Australia, at the beginning of this year, marking its second Region in the country.
It recently launched an infrastructure region in Israel (located in Tel Aviv), namely the AWS Israel (Tel Aviv) Region.
Currently, AWS has 105 Availability Zones across 33 geographic regions. It also plans to launch 12 more Availability Zones and four more AWS Regions in Malaysia, New Zealand, Thailand and the AWS European Sovereign Cloud.
Key Prospects, Competitive Scenario
An increasing number of regions and availability zones across the globe is likely to drive AWS’ customer momentum, which, in turn, will likely boost its financial performance and aid Amazon in capitalizing on the prospects of the global cloud market. This is likely to instill investors' optimism in the stock in the near term.
In the third quarter of 2023, AWS generated revenues of $23.1 billion (16.1% of total sales), which grew by 12.3% year over year. Our model estimate for 2023 AWS revenues is projected at $92.8 billion, indicating growth of 15.8% from 2022.
Shares of Amazon have gained 83.2% on a year-to-date basis.
This apart, Amazon’s aggressive expansion efforts are expected to continue aiding its competitive prowess against its strong peers, such as Microsoft MSFT and Alphabet’s GOOGL Google. Both companies are also leaving no stone unturned to boost their presence in this promising market.
Microsoft Azure became the key driver for Microsoft. MSFT is currently riding on the robust adoption of Azure’s cloud offerings. Azure's increasing number of availability zones and regions across the globe and its strength in the consumption-based business are likely to continue driving MSFT's cloud momentum in the near term.
Similarly, Google Cloud contributes substantially to Alphabet's total revenues. Expanding data centers, availability zones and cloud regions are expected to keep boosting Alphabet's cloud position.
Nevertheless, AWS, with its strengthening global infrastructure, continues to maintain its dominant position in the cloud market.
Per the latest Synergy Research Group data, AWS accounted for 32% of the global cloud infrastructure services market in third-quarter 2023, maintaining its leading position in the booming cloud market.
Microsoft’s Azure, the second-largest cloud service provider, accounted for 23% of the market.
Alphabet’s Google Cloud acquired 11% share of the market, making it the third-largest cloud provider.
Zacks Rank & Another Stock to Consider
Currently, Amazon sports a Zacks Rank #1 (Strong Buy).
Another top-ranked stock in the broader Zacks Computer & Technology sector is Arista Networks ANET, currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks has gained 97% in the year-to-date period. The long-term earnings growth rate for ANET is 15.7%.
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