Citi Report Shows Major Cloud Vendors' Q2 Revenue Growth Accelerates, AI Revenue Outpaces Capex

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A Citi report in the latest daily market report shows that the four major cloud providers generated $103.8 billion in Q2 revenue, a 50% year-over-year increase. Microsoft Azure grew 43%, AWS 37%, Google Cloud 82%, and Oracle OCI 92%. AWS holds a 41% market share, while Google Cloud holds 24%. AWS AI revenue reached $25 billion, up from $15 billion in Q1. Capital expenditures rose by approximately $200 billion. AWS profit margin was 39.4%, and Google Cloud’s was 35.6%. AWS backlog reached $496 billion, and Google Cloud’s reached $514 billion. Citi maintains a “Buy” rating on all four, with target prices of $600, $350, $447, and $330, respectively. The weekly market report highlights continued strong performance across the cloud and AI sectors.

According to Citi’s research report dated July 31, the four major cloud providers collectively generated $103.8 billion in revenue in the second quarter, a 50% year-over-year increase. Microsoft Azure grew 43%, Amazon AWS grew 37%, Google Cloud grew 82%, and Oracle OCI grew 92%. AWS held the largest market share at 41%, while Google Cloud’s share rose to 24%. AWS’s AI business generated an annualized revenue of $25 billion, up from $15 billion in the first quarter. The four cloud providers’ combined quarterly capital expenditures increased by approximately $20 billion sequentially. AWS’s profit margin was 39.4%, and Google Cloud’s profit margin was 35.6%. AWS’s backlog reached $496 billion, while Google Cloud’s backlog reached $514 billion. Citi maintains a Buy rating on Microsoft, Amazon, Google, and Oracle, with target prices of $600, $350, $447, and $330, respectively.

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