SA Asks: Which cloud giant is best positioned to dominate AI?

Despite a recent selloff in the tech sector, shares of several of the world’s top cloud companies are still up double digits year-to-date, buoyed by continued investor enthusiasm over AI.

Shares of Oracle (ORCL) have soared 30% since the beginning of the year, with IBM (IBM) shares gaining 19%. Amazon (NASDAQ:AMZN) and Google owner Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) have both seen a 17% jump in their respective stock prices, while Microsoft (NASDAQ:MSFT) shares are up 11%.

Which brings us to our SA investor question of the day: Which cloud giant is best positioned to dominate AI?

We asked Seeking Alpha analysts Victor Dergunov, Joe Albano and Ahan Vashi to weigh in on the topic.

Victor Dergunov: There are several top “cloud giants” well positioned to dominate their respective areas in AI. Companies that come to mind include Microsoft (MSFT), Amazon (AMZN) and Google (GOOG). However, Amazon’s AWS may have the most potential and may be the most undervalued and underrated cloud/AI beneficiary right now.

Joe Albano: Meta Platforms (NASDAQ:META) in terms of AI from a cloud giant perspective. It has the resources, the open-source models, and the financials to prove it’s working. Meta is unstoppable right now. If it’s from a pure consumer/enterprise cloud play, it’s Microsoft (MSFT) with its ability to leverage OpenAI.

Ahan Vashi: From a business standpoint, Microsoft (MSFT) appears to be best positioned with regard to AI monetization, given its broad enterprise footprint. That said, Amazon Web Services (AMZN) is showing an impressive growth re-acceleration; plus, Amazon (AMZN) stock is priced reasonably and offers the best long-term risk/reward among the cloud hyperscalers. Alphabet (GOOG) is no slouch either, with a dominant position in digital advertising.

While I expect all three cloud giants to do well in the era of AI, the only dominant player in this space is the company that powers them all – Nvidia (NASDAQ:NVDA). In my view, Nvidia’s DGX cloud, offered via Azure, AWS, GCP and OCI, is the future of cloud computing in the era of AI, and with more than 90% market share, Nvidia (NVDA) already owns the AI GPU market!