The stock of Amazon.com (AMZN stock) has taken a severe beating ever since the company released its most recent earnings. On Wednesday, the United States Department of Defense provided additional support for the bullish case for shares.

The Department of Defense (DoD) recently publicly announced the awarding of multiple contracts totaling up to $9 billion for a cloud-computing initiative known as the Joint Warfighting Cloud Capability. They contacted Amazon (ticker: AMZN), Microsoft (MSFT), Alphabet (GOOGL), and Oracle, which are the four most significant cloud-computing corporations in the United States (ORCL).

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The announcement comes just a little over a month after Amazon’s cloud unit, AWS, posted revenue growth of 27% for the third quarter. This was the weakest gain since 2014 and was significantly lower than the 32% that Wall Street had penciled in for the company. This year, Amazon’s share price has dropped by 47%, reaching $90, compared to a decline of 30% for the Nasdaq Composite. Since reporting earnings for the third quarter, it has experienced a decline of almost 20%.

Citigroup’s Ronald Josey said in a note on Thursday that the contract with the Pentagon will boost growth for Amazon’s cloud company, AWS. This is although 2018 has been a challenging year for the technology sector in general.

He added, “we regard the JWCC contract as a possible stimulus for continued Public Sector work together with the continued adoption of AWS across almost every major business.” “We consider the JWCC deal a potential catalyst for continued Public Sector work.”

In addition to the contract, Amazon has two more variables for its stock: new items and pledges from clients totaling billions of dollars. Both of these factors are positive.

Several new Amazon products, including AWS Supply Chain, Amazon Security Lake, and AWS SimSpace Weaver, were unveiled at AWS re: Invent, the most important event in the cloud computing industry. These products include managed services and security measures.

Josey thinks the goods contribute to Amazon’s leadership position across the cloud. According to the research by Piper Sandler analyst Thomas Champion, AWS commands a market share greater than fifty percent, which is three times that of Salesforce (CRM).

In addition, Amazon reported in a statement with the Securities and Exchange Commission that AWS has a total of $104.3 billion in future income from contracts with companies as of September 30. These revenues have yet to be realized.

John Blackledge, an analyst for Cowen, agrees that there is a bull case for the stock. His reasoning is centered on external variables, such as decreasing staff costs and lessened inflationary cost pressures in the coming quarters. He also cites other causes. This month, he reaffirmed his Outperform rating on Amazon shares and increased his price target for the stock from $150 to $160.

Citi’s Josey has set a price target for the stock at $145, representing a 61% increase from where it is now trading.

At least, according to one analyst working on Wall Street, awarding the Joint Warfighting Cloud Capability contract hints at an improving future for the cloud stock market. Dan Ives, an analyst at Wedbush, referred to the transaction as “just the tip of the iceberg” because he thinks that between now and 2030, an additional $30 billion in federal contracts will become available for bidding.

“We believe this will be an incremental tailwind into 2023/2024 that the Street is underestimating with sentiment being quite negative on the sector,” he told Barron’s in an email. “We believe this will be an incremental tailwind into 2023/2024 that the Street underestimates.”

This year has been challenging for cloud-focused thematic exchange-traded funds (ETFs), which have seen their values decline significantly. Both WisdomTree Cloud Computing (WCLD) and Fidelity Cloud Computing (FCLD) have seen significant declines in their share prices, with WisdomTree Cloud Computing falling by more than 50%.

Companies that are held by these ETFs have reported that customers are waiting longer to decide whether or not to make purchases, and these companies have also expressed negative projections for their financial futures. During its earnings call for the third quarter, CrowdStrike Holdings (CRWD) stated that “macroeconomic challenges [had] elongated sales cycles,” while Twilio (TWLO) retracted its previous target of 30% annual revenue growth. These businesses account for more than 1% of the WisdomTree exchange-traded fund.

Although it may be encouraging to hear that the government will spend money on cloud infrastructure in 2023, the industry is on the verge of a downward spiral.

In addition to poor data and decreased business investment, other indications that cloud providers are preparing for a harsh winter include layoffs and cost-cutting measures. For instance, RingCentral (RNG) has announced that it will decrease its personnel and cut back on business travel, expenditure on information technology, and marketing expenses.

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