Amazon (AMZN Quick QuoteAMZN - Free Report) continues to ride on the strength of its Amazon Web Services ("AWS") offerings, which are constantly driving its cloud customer momentum.

The latest selection of AWS by the BMW Group as the preferred cloud provider is a testament to the aforesaid fact. This highlights the efficiency and reliability of AWS's innovative cloud products and services.

With the help of AWS’s compute, generative artificial intelligence, Internet of Things, machine learning and storage capabilities, the BMW Group strives to power its automated driving platform.

It aims to add innovative features to its automated vehicles by developing its next-generation advanced driver assistance system using AWS.

AWS will help scale BMW’s capacity to manage an increase in data creation and usage within automated driving feature development.

Strengthening Customer Base

The latest move by the BMW Group has added strength to the customer base of AWS.

Apart from BMW, AWS was recently selected by Dr. Reddy’s Laboratories as the preferred cloud provider. Dr. Reddy’s shifted its SAP platform to AWS in a bid to boost the development of advanced healthcare applications. It strives to reduce application development time by 30%.

Occidental (OXY Quick QuoteOXY - Free Report) also picked AWS as its preferred cloud provider to boost operational efficiencies and eliminate upfront capital expenditures.

Occidental plans to transfer its core production applications and on-premises information technology infrastructure to AWS in order to accelerate its digital transformation and development of systems for carbon removal plants.

Sumitomo selected AWS to drive its digital transformation by migrating its SAP environments to AWS. It plans to upgrade its SAP environment to SAP S/4HANA on AWS.

We believe that AWS’s expanding customer base will continue to drive its top-line growth. In second-quarter 2023, AWS generated revenues of $22.1 billion (17% of total sales), which grew 12% year over year.

Our model estimate for 2023 AWS revenues is projected at $91.6 billion, indicating growth of 14.4% from 2022.

The strengthening performance of AWS, which has become an integral part of Amazon, will likely instill investor optimism in the stock.

Amazon has gained 64.6% on a year-to-date basis.

Wrapping Up

We believe that AWS’s growing global clientele, on the back of its expanding portfolio as well as data centers and cloud regions, will continue to help the company gain a competitive edge against its peers, namely Microsoft (MSFT Quick QuoteMSFT - Free Report) and Alphabet’s (GOOGL Quick QuoteGOOGL - Free Report) Google.

Amazon currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Microsoft Azure has become the key growth driver for Microsoft. The company is currently riding on the robust adoption of Azure cloud offerings. Azure's increasing number of global availability zones and regions, along with strength in its consumption-based business, is likely to continue driving Microsoft's cloud momentum in the near term.

Similarly, Google Cloud is contributing substantial growth to the total revenues of Alphabet. Expanding data centers, availability zones and cloud regions are expected to keep boosting Alphabet's cloud position.

Nevertheless, AWS, with solid customer momentum, continues to maintain its dominant position in the cloud market.

Per the latest Canalys report, AWS accounted for 30% of global cloud spending in second-quarter 2023, maintaining its leading position in the booming cloud market.

Microsoft’s Azure, the second-largest cloud service provider, accounted for 26% of worldwide cloud spending.

Alphabet’s Google Cloud represented 9% of cloud spending, making it the third-largest cloud provider.