Amazon Pushes AI Expansion in APAC: Will AWS-Upstage Deal Pay Off?
The deal reflects Amazon's optimism for two reasons. First, AWS offers specialized tools like SageMaker, Trainium and Inferentia chips that lower costs and improve efficiency for AI developers. Partnering with Upstage provides Amazon with a high-profile case study of these technologies in action. Second, the collaboration targets regulated industries and public institutions, areas where AWS' compliance capabilities provide a competitive edge and long-term growth opportunities.
Beyond infrastructure, Amazon has also taken a minority investment in Upstage, signaling confidence in Korea's AI ecosystem while ensuring aligned incentives. The agreement extends into a joint go-to-market strategy, which is expected to expand AWS' pipeline across APAC and enhance its global AI credibility. Notably, this comes as AWS continues to post strong financial performance; its second-quarter 2025 results showed double-digit growth (17.5%) in cloud revenues, underpinned by surging demand for AI services.
By combining Upstage's local expertise with AWS' global scale, Amazon is positioning itself to capture high-value workloads and secure leadership in APAC's competitive AI market. This partnership could well become a blueprint for Amazon's broader international AI expansion.
Amazon's Competitors in the AI Space
Microsoft MSFT is reinforcing its leadership in the cloud-AI race through seamless integration of enterprise solutions and AI infrastructure. In the fourth quarter of fiscal 2025, Microsoft Azure grew 39% year over year, lifting annual revenues past $75 billion. Supported by over 400 data centers across 70 regions, the company leverages Copilot and its OpenAI partnership. Microsoft's tightly connected ecosystem — spanning Windows, Office and enterprise software — creates powerful lock-in that keeps businesses anchored to its cloud platform. In Southeast Asia, the company is building a new hyperscale cloud region in Malaysia with three data centers slated for launch by mid-2025. These moves sharpen Microsoft's APAC footprint and strengthen its cloud-AI front against Amazon.
Alphabet Inc. GOOGL is accelerating in cloud and AI, with Google Cloud delivering 32% year-over-year growth in the second quarter of 2025, driven by Gemini models and custom chips. Alphabet's AI ecosystem, spanning Gemini's 450 million users and AI Mode's 100 million users, has strong appeal for startups and developers. The company is also infusing AI into Search, while the U.S. and India rollout of AI Mode is expected to propel further adoption and strengthen Alphabet's cloud growth. In Southeast Asia, Google has invested $2 billion in Malaysia to establish its first data center and Google Cloud hub, aligning with regional digital transformation and AI adoption goals.
AMZN's Share Price Performance, Valuation & Estimates
AMZN shares have gained 4% in the year-to-date period, underperforming the Zacks Internet – Commerce industry and the Zacks Retail-Wholesale sector's growth of 13% and 8.8%, respectively.
AMZN's YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, AMZN stock appears overvalued, trading at a forward 12-month Price/Sales ratio of 3.23X, higher than the industry's 2.29X. AMZN has a Value Score of D.
AMZN's Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AMZN's 2025 earnings is pegged at $6.70 per share, up by 5.8% over the past 30 days. This indicates a 21.16% increase from the figure reported in the year-ago quarter.
Image Source: Zacks Investment Research
Amazon stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
#1 Semiconductor Stock to Buy (Not NVDA)
The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.
One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.
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