American e-commerce giant Amazon.com’s (AMZN) Amazon Web Service (AWS) is gearing up to invest up to $10.45 billion (8 billion pounds) in data centers in the UK, Reuters reported. The cloud service provider plans to spend this amount over a period of five years to build, operate, and maintain data centers in Britain.
AWS’ investment will contribute 14 billion pounds toward the UK’s gross domestic product (GDP) by the end of 2028, as well as create 14,000 jobs in the region. AWS didn’t disclose the exact locations of the facilities for security reasons.
AWS’ Growing Investments in the UK
This is not Amazon’s first investment in the UK. The company’s AWS unit has invested over 3 billion pounds in facilities in London and Manchester since 2022. AWS has also invested huge sums in other European countries, including 15.7 billion euros in Spain and another 7.8 billion euros in Germany. The UK government is also in active talks with Amazon to drive investments in other parts of the country, the country’s finance minister Rachel Reeves said.
Tanuja Randery, AWS’ managing director for Europe, Middle East, and Africa, believes that the expansion of data center facilities in the UK would enable more British companies to leverage its offerings to increase innovation, enhance productivity, and compete effectively with companies across the globe.
Global Cloud Infrastructure Landscape
The race for artificial intelligence (AI) is catching up, with tech giants ramping up their data center investments. AI applications require the massive computing power offered by data centers. According to Precedence Research, the global cloud infrastructure market is estimated to reach over $261 billion in 2024, with North America holding over 40% market share, followed by Europe and Asia Pacific.
AWS continues to be the largest player in the market to date, with about a 30% share. Meanwhile, Microsoft’s (MSFT) Azure and Alphabet’s (GOOGL) (GOOG) Google Cloud Platform rank second and third, respectively. Together, the three American tech titans control most of the global cloud infrastructure market, while the other players command a smaller, single-digit market share.
Is AMZN a Buy Right Now?
Wall Street is highly optimistic about Amazon stock’s trajectory, with a well-established business model encompassing e-commerce, cloud services, advertising services, and logistics solutions.
On TipRanks, AMZN stock commands a Strong Buy consensus rating based on 42 Buys versus one Hold rating. Also, the average Amazon.com price target of $222.88 implies 24.1% upside potential from current levels. Year-to-date, AMZN shares have gained 18.2%.
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