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Amazon’s Cloud Business Faces Crucial Test After Rivals Microsoft and Google Struggle

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Amazon is under intense pressure as it prepares to report its fourth-quarter results on Thursday, with high expectations surrounding its cloud business amid growing concerns over Big Tech’s investments in artificial intelligence (AI). After disappointing earnings from Microsoft and Google, which fueled investor concerns about the costs of AI, Amazon’s performance could be a pivotal moment in the tech sector.

Shares of major tech companies surged in recent years, driven by the belief that the AI boom and its massive data center needs would sustain growth. However, these expectations were rattled when DeepSeek, a Chinese AI startup, announced breakthroughs at a fraction of the cost, causing a selloff in tech stocks.

Despite these challenges, Amazon may be in a stronger position than its rivals, analysts say. Amazon Web Services (AWS), the world’s largest cloud services provider, is poised to report a 19.3% revenue growth, its highest increase in eight quarters. The company is also expected to benefit from its early embrace of DeepSeek’s AI models and plans to release its generative AI voice service, Alexa, later this month.

While Microsoft and Google face slowing cloud growth, Amazon has maintained optimism about its cloud business. Some analysts believe that Amazon has regained ground in the AI race, thanks to its increased investment in companies like Anthropic and a broad selection of AI models available through AWS. “We believe AWS is regaining share,” said Gil Luria, an analyst at D.A. Davidson, highlighting Amazon’s strength in AI despite initial slower growth compared to Microsoft and Google.

Amazon’s valuation remains higher than its competitors, with a forward price-to-earnings ratio of nearly 39, compared to Microsoft’s 29 and Alphabet’s 22.4. This strong position could help Amazon surpass market expectations and emerge as a leader in the AI-driven cloud market.

In addition to its cloud growth, Amazon is benefiting from a strong retail performance. Analysts expect Amazon’s North American sales to rise 9% in the fourth quarter, fueled by a successful holiday shopping season. Increased consumer spending, particularly in e-commerce, and Amazon’s expansion into groceries, pharmacy, and fashion are expected to propel its growth in the retail sector.

With a favorable holiday season and a competitive edge in AI, Amazon’s upcoming report could restore confidence in the tech giant, positioning it for long-term success.

 

Disney Parks Transition from Halloween to Holiday Season with Overnight Transformations

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As Halloween concludes, Disney theme parks have started their swift shift from spooky decor to holiday cheer, preparing to dazzle guests with festive greens and holiday lights. This annual transformation from pumpkins to poinsettias begins subtly in mid-October, as teams quietly install lighting rigs and other inconspicuous holiday elements. In a seamless, overnight process involving horticulturists, tech services, crane operators, and culinary experts, Disney meticulously crafts its iconic seasonal decor. The full transition takes about six weeks, culminating in a complete holiday experience for guests by early November.

Starting November 8 at Walt Disney World in Florida and November 15 at Disneyland in California, Disney’s holiday offerings will be on full display. Both parks will feature sparkling Christmas trees, ornate character costumes, seasonal parades, exclusive food and beverage items, and special merchandise. According to Disneyland Resort President Ken Potrock, these popular seasonal changes are made possible by the dedication of Disney’s cast members, who work tirelessly overnight to create magical experiences for guests.

The holiday season is a significant revenue period for Disney, particularly in October and December, which now outpace summer as the parks’ busiest travel months. Gavin Doyle, founder of MickeyVisit.com, attributes this popularity to Disney’s strategy of offering unique, limited-time experiences that draw guests back year after year. The mix of exclusive events and holiday attractions has made Disney’s Halloween and winter seasons a key part of guests’ annual traditions, encouraging repeat visits and longer stays.

Disney’s experiences division, encompassing parks, cruises, hotels, and consumer products, reported $9.13 billion in revenue for the October to December quarter of 2023, far surpassing earnings from other quarters. This year’s Halloween season kicked off early with Mickey’s Not-So-Scary Halloween Party in Florida on August 9 and the Oogie Boogie Bash in California on August 25, extending the Halloween crowds well into summer.

The holiday season will feature festive overlays for iconic Disneyland attractions like Sleeping Beauty’s Castle, It’s a Small World, and the Haunted Mansion, with holiday-themed parades and fireworks beginning November 15. In Florida, Mickey’s Very Merry Christmas Party starts November 8, followed by Jollywood Nights on November 9, with attractions like Space Mountain and the Jungle Cruise getting holiday-themed updates. Themed character interactions, Christmastime parades, and fireworks displays further enhance the seasonal atmosphere, offering guests new surprises with each visit.