Could Amazon (AMZN)'s European Sovereign Cloud Ambitions Shift Its Regulatory Narrative?

• Amazon Web Services and SAP SE recently announced plans to bring SAP Sovereign Cloud capabilities to the upcoming AWS European Sovereign Cloud, backed by a planned €7.8 billion investment and set to launch its first region in Germany in 2025.
• This partnership aims to address Europe’s evolving digital sovereignty needs and expands AWS's reach among regulated industries, while Amazon also faces reputational and regulatory scrutiny as its high-profile Seattle trial over alleged deceptive Prime sign-up and cancellation practices gets underway.
• We’ll examine how the AWS-SAP sovereign cloud launch could influence Amazon's growth prospects amid increased regulatory attention in Europe.

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Amazon.com Investment Narrative Recap

To be a shareholder in Amazon, you need to believe in the company’s ability to capture long-term growth from cloud computing and AI, even as cost pressures and regulatory scrutiny increase. The recent AWS-SAP European Sovereign Cloud announcement strengthens AWS’s appeal to regulated industries in Europe, but does not materially alter Amazon’s most important short-term catalyst, AI-driven AWS expansion, or its biggest risk, which remains ongoing regulatory and legal actions.

A recent expansion of Amazon’s Multi-Channel Fulfillment to support merchants on SHEIN, Shopify, and Walmart highlights how logistics innovation continues to reinforce the company’s competitive moat. While AWS remains the main focus for near-term growth, these retail infrastructure upgrades illustrate Amazon’s multifaceted approach to driving revenue and customer stickiness.

In contrast, investors should be aware that regulatory actions, like those currently underway in Europe and the U.S., could impact Amazon’s...

Read the full narrative on Amazon.com (it's free!)

Amazon.com's narrative projects $905.9 billion revenue and $111.9 billion earnings by 2028. This requires 10.6% yearly revenue growth and a $41.3 billion increase in earnings from $70.6 billion today.

Uncover how Amazon.com's forecasts yield a $263.74 fair value, a 19% upside to its current price.

Exploring Other Perspectives

Private estimates from 165 Simply Wall St Community members put Amazon’s fair value in a wide US$167.01 to US$434.13 range. Amid this diversity, keep an eye on the risk that intensifying legal or regulatory pressures could shape Amazon’s future performance in ways not yet captured by consensus forecasts.

Explore 165 other fair value estimates on Amazon.com - why the stock might be worth as much as 97% more than the current price!

Build Your Own Amazon.com Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Amazon.com research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Amazon.com research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Amazon.com's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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