Since then, its wild popularity has put AI front and center the minds of investors. ChatGPT was introduced by Microsoft-backed OpenAI late last year. By incorporating ChatGPT's latest LLMs into Azure, Microsoft hopes to attract new customers. The company is now using AI as a tool to accelerate cloud growth and gain share. Again, slower then the 31% in fiscal Q2 and 35% in fiscal Q1. Microsoft's Azure business delivered 27% year-over-year growth in the company's fiscal third quarter. MSFT YTD mountain Microsoft's stock performance year to date.
Last month, AWS launched Bedrock, which allows developers to build and scale AI applications through its cloud. We are intrigued to see what Amazon does in AI. Looking at the company more broadly, management recognizes that they're spending too much and that they must take additional action to cut costs to optimize the business and enhance profitability. Similar to some analysts' predictions, we think AWS growth will bottom in the second quarter and accelerate into the second half of the year, partly due to easing year-over-year comparisons. Looking ahead, Olsavsky said on the call, "We're continuing to invest in infrastructure to support AWS customer needs, including investments to support Large Language Models and Generative AI." The Club's take: We think the deceleration in AWS is a near-term issue that could resolve itself later this year. Since peak growth in 2015, Amazon's cloud revenue gains have generally been trending lower. Growth in Amazon Web Services (AWS) came in at 16% year-over-year in the first quarter, however, management informed investors during the conference call that growth had slowed materially by about 500 basis points in April as customers continued to optimize spending in the cloud, creating a continued headwind to growth. AWS grew more than 20% in Q4 of 2022 and 27.5% in Q3. However, those gains quickly evaporated as the post-earnings call got underway and Wall Street learned of slowing cloud growth in April, the first month of Q2. Amazon's first-quarter beat initially sparked an after-hours stock rallying. AMZN YTD mountain Amazon's stock performance year to date. Here's a look at how each tech company's cloud unit performed in the latest quarter, in market-share order, and how the Club sees their businesses progressing moving forward. Microsoft was at 23% and Google was at 10%. Amazon, by far, still held the largest cloud market share at 32% as of Q1, according to Synergy Research Group, which tracks IT and cloud markets. As more and more businesses of all sizes continue their digital transformations, Amazon, Microsoft and Alphabet aim to be there to provide cloud solutions.
Cloud computing is becoming an essential part of doing business for many companies nowadays, but its adoption is still in its infancy. "As expected, customers continue to evaluate ways to optimize their cloud spending." The cloud is considered a growth engine for these tech giants, so investors are keenly focused on how things are going in this area. For example: "Customers of all sizes and in all industries continue to look for cost savings across their businesses, Amazon CFO Brian Olsavsky said during the company's first-quarter earnings call Thursday evening. Last week, the big three cloud providers in their own ways blamed gathering economic headwinds.
That would be robust by most standards, but the explosive gains of the past have been waning. Wall Street was largely anticipating what indeed played out: high double-digit percentage gains in cloud for each. The March quarter slowdown in cloud growth was not a surprise. However, as each of them leans into artificial intelligence, longer-term cloud prospects look much brighter. With investors staring down another big week of tech earnings, last week brought quarterly revenue beats from Club holdings Amazon (AMZN), Microsoft (MSFT) and Alphabet (GOOGL) - despite continued deceleration in cloud growth. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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