UBS Group AG: Corporate cloud spending stable and healthy. Amazon.com, Inc. (AMZN.US), Alphabet Inc. Class C (GOOGL.US) and Microsoft Corporation (MSFT.US) will benefit.

UBS Group AG stated that the three tech giants, Amazon.com, Inc. (AMZN.US), Alphabet Inc. Class C (GOOGL.US), and Microsoft Corporation (MSFT.US), are expected to benefit from "stable" and "healthy" cloud spending as they prepare to announce their financial reports. UBS Group AG analyst Karl Keirstead pointed out after discussions with 11 clients and partners at the Oracle Corporation's AI World that there is a positive atmosphere surrounding discussions about core cloud infrastructure spending. He added that spending on artificial intelligence inference and training should also bring upside potential. He stated, "We believe that AWS has limited upside potential relative to Wall Street expectations, while Azure and Google Cloud have greater upside potential." Digging deeper, Karl Keirstead stated that the overall tone of the discussions was more positive than three months ago, noting an improvement in the atmosphere surrounding cloud infrastructure spending. He explained, "Although several Fortune 500 companies mentioned that their IT budgets for 2025 will remain flat, not a single one - no one - plans to further cut or delay spending. In fact, some partners mentioned they started to see budget loosening in the third quarter, with signs of 'thawing.' While this survey focused on about 85%-90% of enterprise clients generating revenue from AWS, Azure, and Google Cloud (i.e. 'core' demand), cloud GPU demand from AI model suppliers and startups remains strong, with no apparent signs of slowing down in the third quarter of 2025." Other notable conclusions from the discussions include: the growth in demand for data software driven by artificial intelligence should benefit hyperscalers such as Microsoft Corporation Azure and companies like Snowflake (SNOW.US). Furthermore, it is widely believed in the industry that Microsoft Corporation Azure is gaining market share, with three partners stating that their Azure business accelerated in the third quarter or is expected to further accelerate in the fourth quarter. Conversely, these partners described their AWS business as "slightly below expectations" in the third quarter but expect it to remain stable in the fourth quarter. Microsoft Corporation and Alphabet Inc. Class C are expected to announce their quarterly earnings after the U.S. market closes on October 29, while Amazon.com, Inc. will release its quarterly results after the U.S. market closes on October 30.