Amazon (NASDAQ:AMZN) has secured a cloud services contract worth $2 billion ($1.3 billion) with the Australian government. This contract will involve building three data centers for securely sharing information with allies.
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The Benefit of the Amazon Contract for Australia
Amazon Web Services (AWS), the tech giant’s cloud computing business, already provides cloud computing services to the U.S. and UK governments. The new contract is expected to enhance Australia’s intelligence sharing, military information exchange, and AI data analysis.
Australia is a member of the Five Eyes intelligence alliance, which also includes the U.S., UK, New Zealand, and Canada. As a Five Eyes member, Australia will boost “interoperability” with the U.S., ensuring a more resilient and capable defense force, according to Australian Defense Minister Richard Marles.
Amazon’s AWS – An Important Business for AMZN
Amazon’s cloud computing segment, AWS, is a fast-growing business for the company. In fact, in Q1, AWS generated revenues of $25 billion, an increase of 17% year-over-year. AWS accounted for more than 15% of the company’s total revenues in the first quarter.
Is Amazon a Buy, Sell, or Hold?
Analysts remain bullish about AMZN stock, with a Strong Buy consensus rating based on a unanimous 42 Buys. Over the past year, AMZN has surged by more than 50%, and the average AMZN price target of $221.70 implies an upside potential of 12.2% from current levels.
