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Amazon Boosts Satellite Data Reach With AWS Ground Station

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Amazon’s (AMZN - Free Report) strong efforts toward strengthening cloud service offerings bode well for its customer-oriented focus. Moreover, the company is firing on all cylinders to expand presence in the booming cloud computing space backed by robust product and services portfolio of Amazon Web Services (AWS).

This is evident from its move of making AWS Ground Station generally available to customers. This initiative was launched in the later part of 2018.

Notably, the new service offers low-latency and access to other AWS services such as Amazon EC2, Amazon Elastic Block Store (EBS), Amazon S3 and Amazon Elastic File System (EFS), to name a few, with the help of its antennas which are located at close proximity to AWS Regions.

This in turn aid customers in efficiently controlling satellites from AWS, download, store and process data from satellites into AWS Global Infrastructure Regions.

AWS Ground Station enables customers to control satellites and downlink data by leveraging the power of Amazon EC2. Further, it allows storage and sharing of data in Amazon EBS, Amazon EFS and Amazon S3.

Additionally, users will be able to analyze the downloaded satellite data and draw insights from it by utilizing AWS analytics and machine learning services.

We believe the latest move of Amazon is likely to enhance offerings in satellite data space.

Amazon Poised to Grow

We note that AWS Ground Station’s robust features, functions, cost effectiveness and synchronization with other services remain key catalysts. These features will lead to strong adoption of AWS’ new service, which in turn will benefit its performance in the cloud market further.

This is expected to drive the top line of Amazon by accelerating revenues of AWS which is one of its high-margin generating businesses. In the first-quarter 2019, AWS revenues accounted for 13% of total sales and increased 41.4% year over year.

Amazon’s strengthening cloud computing footprint and strong retail position provides steady source of revenues and profits. Further, the company’s strong cash flow generation ability is expected to help it in expanding reach in the satellite data space.

Coming to the price performance, shares of Amazon have returned 13% over a year against the industry’s decline of 9.9%.



 

Growing Focus on Satellite & Space

AWS has been eyeing the satellite and space area for quite some time now. It has extended its tie up with Lockheed Martin (LMT - Free Report) to expand presence in satellite data.

The deal enables the company to introduce a new antenna service on its platform by combining AWS Ground Station service with Lockheed Martin’s Verge antenna network.

This is in sync with AWS’ intention to utilize its 12 antennas in direct transmission of data from satellites to its data centers.

Apart from this, AWS won a contract from Iridium Communications (IRDM - Free Report) to develop a satellite-based network called CloudConnect for IoT applications. Notably, this deal has provided AWS with an opportunity to develop satellite-based cloud applications.

Additionally, Amazon is in talks with the president of Chile to house and mine astrodata from Chile’s giant telescopes. Moreover, Amazon hosts cloud platform for the Hubble Telescope’s data and the International Centre for Radio Astronomy Research in Australia.

Notably, these endeavors are likely to strengthen the AWS’ services portfolio which in turn will aid its dominant position in the cloud market.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold).

A better-ranked stock in the broader technology sector that can be considered is PayPal Holdings, Inc. (PYPL - Free Report) which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for PayPal is pegged at 17.91%.

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