By Deborah Mary Sophia

Feb 5 (Reuters) - The pressure is on Amazon.com to deliver on lofty expectations for cloud computing in its fourth-quarter results on Thursday, after Microsoft and Google's lackluster reports jolted financier faith in Big Tech's billion-dollar investments in AI.

Shares of significant tech business rose in the past 2 years on the belief that huge datacenter needs for artificial-intelligence technologies would power investment for years.

But that was before Chinese start-up DeepSeek said it had attained AI developments at a fraction of the cost, speeding up a selloff in technology stocks that some state was past due.

Still, Amazon may be much better positioned than competitors to take advantage of less expensive AI, analysts say, wavedream.wiki due to its huge cloud service and lower direct exposure to costly large-language models that power apps like ChatGPT.

Amazon Web Services, the world's largest cloud services service provider, is expected to post its strongest earnings boost in 8 quarters at 19.3%, according to data put together by LSEG.

But Microsoft and Meta were both forced to protect their AI costs plans recently, and shares of Google-parent Alphabet plunged 8% on Wednesday after it said it would be spending more on capex than experts expected.

"Microsoft and Google results have actually put a lot more of a microscopic lense on Amazon's cloud development," said Dave Wagner, portfolio supervisor at Aptus Capital Advisors, which holds shares in all three innovation business.

"But if Amazon can squash it on their cloud numbers, the marketplace's going to absolutely love that report."

The company was the very first huge cloud provider to embrace DeepSeek's AI models last month and has said its capital costs, mainly on AI, would be more than the $75 billion it approximated for 2024.

Slowing growth at Microsoft Azure and Google Cloud, the 2nd- and third-biggest cloud players, has stimulated some caution from experts about AWS' performance.

"Microsoft said it was capacity constrained, Google said it was capability constrained. More than likely, Amazon is going to state it may have been capacity constrained as well and that's why its development rate isn't rather as much as what the market may have anticipated," said Bob O'Donnell, chief analyst at TECHnalysis Research.

Some experts see the weakness at rivals as an indication that Amazon may have caught up in the AI race through efforts consisting of doubling its financial investment in Anthropic and providing a wide choice of AI models on its cloud platform.

"We in fact believe that AWS is regaining share. It had been growing a lot slower than Microsoft Azure and Google Cloud for a time period, however we think that as Amazon has actually captured up on its AI offering, it may have less of a deceleration than Azure and Google Cloud," D.A. Davidson analyst Gil Luria said.

The business has actually maintained a greater appraisal than some of its rivals, with a present forward price-to-earnings ratio of almost 39. Microsoft's forward P/E is 29 and Alphabet's 22.4, according to LSEG data.

RETAIL STRENGTH

The e-commerce giant's results are also most likely to gain from a healthy holiday shopping season, after rival retailers such as Target and a multitude of apparel companies provided rosy forecasts over the past month.

Amazon's North American sales for the fourth quarter are predicted to rise 9% year-on-year. After a downturn in online sales growth previously this year, analysts say Amazon is primed for a rebound in the retail service, which has actually affected its post-earnings share movements over the previous 2 quarters.

Data from Adobe Analytics revealed U.S. buyers spent lavishly online between November and December 2024, spending more than $240 billion, drawn by deep discount rates on whatever from TVs to toys.

The vacation costs growth rate of 8.7% nearly from the 4.9% taped in 2023, the data showed.

Amazon has also attempted to enhance shipment times and expanded product merchandise, including its focus on grocery, pharmacy and style - moves analysts state will help propel development.

"Most indicators are that it was an excellent quarter. There was a good holiday for the consumer and so there's plenty of factor to believe Amazon will have succeeded because side of the business," Luria said.

(Reporting by Deborah Sophia in Bengaluru; Editing by Pooja Desai)