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MARKETS LIVE BLOG:

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Nvidia tumbles 10%, Amazon loses more than 2% while Apple ends 1% lower

Amazon (AMZN) Boosts AWS Portfolio Offerings With Security Lake

Zacks Equity Research
·3 min read

Amazon’s AMZN cloud division, Amazon Web Services (AWS), recently made its purpose-built security data lake, called Amazon Security Lake, generally available to strengthen its services portfolio.

The new service aids in the simplification of compliance monitoring and security data management across hybrid and multi-cloud environments by centralizing an organization’s security data across AWS environments. This way, it allows customers to aggregate, normalize and store data seamlessly and enables them to respond to security events faster.

Security Lake develops a security data lake using Amazon Simple Storage Service (Amazon S3) and AWS Lake Formation to automatically set up security data lake infrastructure in a customer’s AWS account.

Further, it makes it easy for the security teams to collect, combine and analyze security data as it transforms the incoming security data into the Open Cybersecurity Schema Framework (OCSF) open standard.

Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Customer Base to Expand

We believe that the underlined service will help AWS gain strong momentum among various businesses as it provides a purpose-built data lake that helps in understanding the security posture in a better way, which in turn aids in improvising workloads, applications and data protection.

Notably, customers like Cribl, CrowdStrike, Datadog, SentinelOne, Splunk, Volkswagen Financial Services, Novozymes, Jumia and Wiz have already shown interest in Amazon Security Lake.

We believe that the growing customer momentum will continue to drive AWS's top line.

In first-quarter 2023, AWS generated revenues of $21.3 billion (17% of total sales), which grew 16% year over year.

Bottom Line

We believe that AWS’s strengthening clientele across the world will continue to aid Amazon in gaining a competitive edge against its strong peers like Microsoft MSFT and Alphabet's GOOGL Google.

Microsoft Azure has become the key growth driver for Microsoft. The company is currently riding on the robust adoption of Azure cloud offerings. Azure's globally increasing number of availability zones and regions, along with strength in its consumption-based business, is likely to continue driving Microsoft's cloud momentum in the near term.

Similarly, Google Cloud is contributing substantial growth to the total revenues of Alphabet. Expanding data centers, availability zones and cloud regions are expected to keep boosting Alphabet's cloud position.

AWS’s growing efforts toward strengthening its portfolio offerings are likely to keep it ahead of the above-mentioned peers.

Apart from Amazon Security Lake, the company recently introduced a new configuration for Amazon Aurora, namely Amazon Aurora I/O-Optimized, which provides improved price performance and predictable pricing for I/O-intensive applications.

Further, it unveiled three new capabilities for its threat detection service called Amazon GuardDuty - GuardDuty EKS Runtime Monitoring, GuardDuty RDS Protection and GuardDuty Lambda Protection.

The company also announced the general availability of AWS Telco Network Builder, which automates the deployment and management of telco networks on AWS.

We believe that portfolio strength will continue to drive AWS’ customer momentum, which, in turn, will aid Amazon in sustaining its cloud dominance. This will instill investor optimism in the stock in the days ahead.

Notably, Amazon has gained 43.6% on a year-to-date basis.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold).

A better-ranked stock in the broader Zacks Computer & Technology sector is CrowdStrike CRWD, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CrowdStrike has gained 52.1% in the year-to-date period. The long-term earnings growth rate for CRWD is currently projected at 30.8%.

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