12:34 PM EDT, 10/22/2025 (MT Newswires) -- Amazon's ( AMZN ) Amazon Web Services appears to have limited upside to current market expectations for Q3, while Microsoft's ( MSFT ) Azure and Alphabet's (GOOG, GOOGL) Google Cloud show more potential for outperformance, UBS said in a note Tuesday.

The analysts said that these insights are based on their recent conversations with 11 customers and partners. Microsoft ( MSFT ) and Alphabet are set to release their quarterly results on Oct. 29, and Amazon ( AMZN ) on Oct. 30, according to the note.

The analysts said that demand for core cloud infrastructure remains stable and healthy, with "strong" momentum in artificial intelligence-related workloads, such as inference and training.

Compared with three months ago, the tone around cloud infrastructure spending has improved, UBS said. Back in Q1, many customers were cautious, slowing spending due to macroeconomic concerns and trade tariffs. That caution eased going into Q2, which ended up being one of the strongest ever for cloud infrastructure providers, the analysts said.

The analysts said that based on their findings, they estimate Q3 growth targets to be 39% for Azure, 18% for AWS, and 35% for Google Cloud. They are also raising their constant currency growth forecast for Azure to 39% from 38%.

UBS analysts said they are keeping their AWS growth estimate at 17% since their AWS checks were "less robust." AWS could see stronger results in late 2025 and early 2026 as it brings more infrastructure capacity online, the analysts added.

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