Amazon Pushes AI Expansion in APAC: Will AWS-Upstage Deal Pay Off?

Core Insights - Amazon is enhancing its AI strategy in the Asia-Pacific region through a partnership with South Korea's AI startup Upstage, which will utilize AWS for training its large language model, Solar, thereby solidifying Amazon's presence in a rapidly growing AI market [1][3] Group 1: Amazon's AI Strategy - The partnership with Upstage reflects Amazon's confidence in AWS's specialized tools like SageMaker, Trainium, and Inferentia chips, which are designed to reduce costs and improve efficiency for AI developers [2] - Amazon's minority investment in Upstage indicates a commitment to the Korean AI ecosystem and aligns incentives for both companies, while a joint go-to-market strategy aims to expand AWS's reach across the Asia-Pacific [3][4] Group 2: Financial Performance and Market Position - AWS reported a 17.5% year-over-year growth in cloud revenues for Q2 2025, driven by increasing demand for AI services, showcasing strong financial performance [3] - Amazon's stock is currently trading at a forward Price/Sales ratio of 3.23X, which is higher than the industry average of 2.29X, suggesting that the stock may be overvalued [10] - The Zacks Consensus Estimate for Amazon's 2025 earnings is $6.70 per share, reflecting a 21.16% increase compared to the same quarter last year [12]