Amazon Takes Aim at Microsoft's Turf With New AI Agents as Cloud Business Hits a Four-Year High

Amazon unveils AI-powered HR and logistics tools, reports record AWS revenue, and plans $200B in AI spending to dominate enterprise software.

The battle for corporate software supremacy is heating up, and Amazon is no longer content to simply rent out the computing power. The e-commerce and cloud giant is now directly challenging established players like Microsoft, Oracle, and Salesforce with a fresh wave of artificial intelligence tools designed to embed itself deeper into the day-to-day operations of its business customers.

Two new systems are leading the charge. "Amazon Connect Talent" automates the initial screening of job applicants, taking a load off human resources departments. Meanwhile, "Amazon Connect Decisions" targets logistics teams, promising to streamline supply chain management. Both products are born from Amazon's own internal experience, now repackaged as commercial offerings.

The offensive comes as Amazon's core cloud business, Amazon Web Services, is firing on all cylinders. AWS posted revenue of $37.6 billion in the first quarter, a 28% jump that marks its fastest growth in nearly four years. The division also delivered record margins, even as the company pours capital into building out artificial intelligence infrastructure.

That spending is staggering. Amazon plans to deploy roughly $200 billion in capital expenditures this year, with the bulk going toward AI-related projects. CEO Andy Jassy has noted that customers have already made substantial commitments against that budget. The company is also investing $25 billion in data centers in Mississippi, a project expected to create around 2,000 full-time jobs.

The logic behind the software push is straightforward. Industry analysts project that global AI investment will exceed $1 trillion annually by 2029. Amazon wants to sell not just the raw computing horsepower but the finished applications that run on top of it. If successful, the strategy will lock corporate clients even more tightly into the Amazon ecosystem.

First-quarter results provided the financial muscle for this expansion. Total revenue reached $181.5 billion, up 17% from a year earlier. Earnings per share came in at $2.78, well above the $1.64 consensus estimate from analysts. The advertising business also shined, with revenue jumping 24% to $17.24 billion, while North American retail margins improved notably.

Amazon is simultaneously expanding beyond software and cloud. The company struck a deal in mid-April to acquire Globalstar for roughly $11.6 billion, a move designed to bolster its Project Kuiper satellite network and compete in the satellite-internet market.

The stock market has rewarded the multi-pronged strategy. Shares closed at roughly $268 on Friday, up about 24% from a month earlier. Analysts have been racing to raise their price targets. Robert W. Baird lifted its target to $300 with an "Outperform" rating. KeyCorp went to $330, and Telsey Advisory Group raised its target to $315, both with positive ratings.

At a price-to-earnings ratio of around 32, the stock is not cheap. But many market observers argue the valuation is justified given the growth trajectory in cloud and advertising, combined with Amazon's early positioning in the AI infrastructure market. The big question now is whether AWS can sustain its 28% growth rate into the second quarter—and whether the new AI agents can carve out a meaningful share of a software market long dominated by incumbents.