Episode summary
Amazon Soars on Fastest Cloud Growth in Years | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Anurag Rana, Ryan Mallory, Paul Hardart
Summary
Amazon’s latest report was framed as a turning point for AWS after months of investor anxiety that it was losing AI-related momentum to Microsoft, Google and Oracle. The analyst said AWS generated $33 billion in revenue, up 20% from a year earlier and above the 18% growth Wall Street expected, while Amazon also sounded more confident about next year’s capex and chip business. That helped recast AWS as the long-term core of Amazon’s AI story, even if it lacks a consumer AI product like ChatGPT hosted on Azure.
The discussion then widened to the infrastructure bottleneck behind AI. Ryan Mallory of Flexential argued that power availability is now the key constraint for data centers, with demand shifting from traditional hubs like northern Virginia and California toward Oregon, Utah, Colorado, Texas and North Carolina. He said data-center power needs could reach 580 terawatts by 2028 and stressed that cooling, water use and permitting for small modular reactors will shape how quickly the industry can expand.
A final segment turned to legacy media, where Paul Hardart argued Warner Bros. Discovery should keep maximizing value through a sale or strategic breakup. He said scale matters in streaming because consumers are tired of paying for too many services, and he sees HBO Max and Warner’s IP as highly valuable to buyers like Comcast, Netflix, Apple or Paramount.
Key takeaways
- The analyst said AWS revenue rose to $33 billion, up 20%, and called it a reset in the market’s view of Amazon’s cloud growth.
- The analyst argued AWS is still the “OG of the cloud,” but AI’s first consumer wave has been captured by Microsoft Azure, not Amazon.
- Ryan Mallory said power availability has become “the new real estate” for data centers, with new demand shifting to markets such as Texas, Utah and North Carolina.
- Mallory said data-center power demand could rise to 580 terawatts by 2028, underscoring the scale of the AI buildout.
- Paul Hardart said Warner Bros. Discovery should keep pursuing value through a sale or breakup because scale is increasingly necessary in streaming.
- Hardart said HBO Max and Warner’s IP could be attractive to buyers that want more content, more subscribers and more pricing power.
Notable quotes
“AWS acceleration they were very confident about how it's going to do next year capex is going up their chip business is doing well”
“I think this is one of the biggest risks for all cloud providers, not just Amazon but Microsoft also”
“by 2028 there's going to be 580 terowatts and so what we're seeing is this massive increase in power demand”
“you know, the question is, should they be sold? Should they merge with another company? It's a proud company with a lot of just legacy media assets”
How the episode opens
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Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. All right, let's get back to Amazon.
There's a stock that's working and it's working because the cloud business for them and the AI play and that's been the story behind uh Amazon and in stock for you know better part of 101 15 years here. It's not so much the retail the stuff that we interact with Amazon with getting the packages out the door. It's all about uh their cloud business.
Honor Rana he's a technology analyst for Bloomberg Intelligence the technology analyst for Bloomberg Intelligence. Honor talk to us about the uh the Amazon Web Services. How did they do last quarter?
Yeah, I think this is the one that really changed the the tone or the narrative of AWS because when you look at over the last 6 months or so there is a there is you know you could say a a fear out there that AWS is losing market share to the likes of Oracle to the likes of you know Google and and Microsoft because the other three are showing momentum for their AI workloads but it wasn't abs it was absent for AWS in fact their capex went down a little bit last quarter or you know when they reported last stock was down you know when when they had reported their second quarter results but finally they came out yesterday AWS acceleration they were very confident about how it's going to do next year capex is going up their chip business is doing well so I think from that point of view that's a big overhang away from the stock uh people should be happy with this and when it comes to AWS I feel like that's the OG of the cloud computing I mean whenever we talk about um cloud it's really Amazon leading the way and then of course Alphabet Microsoft um their growth rates were much faster than Amazon because Amazon had a bigger base overall.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- amazon web services growth
- cloud revenue
- ai power strain
- power capacity constraints
- warner bros sale costs
Companies and tickers mentioned
- AMZN
- Amazon
- Warner Bros. Discovery
- Flexential
Watch the episode
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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