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The Pentagon announced that its $9B Joint Warfighting Cloud Capability contract had been awarded to Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL) and Google (NASDAQ:GOOG) (GOOGL), but investment firm Wedbush Securities said Oracle and Google were “shining like a bright star” after their inclusion in the deal.
Analyst Dan Ives said the deal, announced on Wednesday, was the “single biggest” to come out of Washington and a “huge win” for all four companies, but that Google (GOOG) (GOOGL) and Oracle (ORCL) benefited more as cloud computing was previously seen as a two horse race between Amazon (AMZN) Web Services and Microsoft (MSFT) Azure.
“Both vendors did well in cloud bake offs and have significantly raised their cloud and growth profile over the past few years inside and outside of the Beltway,” Ives wrote in a note to clients.
Oracle (ORCL), Microsoft (MSFT), Amazon (AMZN) and Google (GOOG) (GOOGL) were all higher in premarket trading on Thursday.
Microsoft (MSFT) had been the sole winner of the previous $10B Joint Enterprise Defense Infrastructure, or JEDI, contract. The JEDI contract was canceled in July 2021 after Amazon (AMZN) sued the government alleging that its exclusion may have been related due to former President Trump’s dislike of Amazon CEO Jeff Bezos, who also owns the Washington Post. Oracle (ORCL) also previously challenged the deal.
Nonetheless, Ives noted that the deal is “significant” for all four companies and will “serve as the core foundation providing access to data for US military personnel around the world.”
Citi analyst Ronald Josey noted that the fact that the deal was given to all four companies “highlights just how competitive the cloud industry continues to be and the increasing adoption of the multi-cloud approach among buyers.”
Josey added that while AWS remains the leader in cloud computing in terms of products, capabilities and scale, the deal is likely to boost each provider’s public sector business. Josey has a buy rating and $145 price target on Amazon (AMZN).
On Tuesday, it was reported that Microsoft (MSFT) was looking at building a new “super app” that would attempt to break the strangehold that Apple (AAPL) and Google (GOOG) (GOOGL) have in the mobile technology space.
