Cloud Giants Back in Favor, Hang Seng Index Set to Benefit
On.cc · 1 SOURCESabout 1 hour ago2 MIN
Summary
Amazon Web Services and Microsoft Azure both delivered accelerated growth in the second quarter, easing market concerns about heavy AI capital expenditure and long payback periods . This success is reshaping global fund pricing for cloud and AI application stocks, with capital rotating from pure hardware plays toward platform technology companies with clear business models . Analyst Mak Ka-ka at SinoPac Securities (Asia) believes this "cloud dividend" logic will gradually transmit to Hong Kong and mainland markets, lifting valuations for internet and telecom heavyweights in the Hang Seng Index .
Key Points
- Amazon's AWS posted quarterly revenue of approximately US$42.2 billion, up about 37% year-on-year, marking its fastest growth in 18 quarters .
- Microsoft Azure's annualized revenue surpassed US$100 billion, with cloud business growing roughly 40% year-on-year .
- Major cloud providers have locked in near-trillion-dollar long-term cloud computing contracts, significantly improving revenue visibility and growth certainty .
- Alibaba Cloud leads China's AI cloud market with 38.1% share, exceeding the combined total of second through fourth place, per Omdia's 2025 report .
- Tencent's enterprise services including cloud are forecast to accelerate to about 25% growth, driven by user traffic and diverse application scenarios .
Why It Matters
Hong Kong investors holding Hang Seng Index trackers or tech-focused portfolios stand to benefit directly, as Tencent and Alibaba together carry significant index weighting . With global funds already rotating toward AI application and cloud services plays since June, strong August earnings from these companies could trigger a valuation re-rating and inject fresh momentum into the HSI's rebound .
Hong Kong investors holding Hang Seng Index trackers or tech-focused portfolios stand to benefit directly, as Tencent and Alibaba together carry significant index weighting . With global funds already rotating toward AI application and cloud services plays since June, strong August earnings from these companies could trigger a valuation re-rating and inject fresh momentum into the HSI's rebound .