admin Amazon joined the exclusive $2 trillion club on Wednesday after Wall Street investors pushed the value of the e-commerce giant’s stock past that threshold.
Shares in Amazon.com Inc. ended the day up almost 4%, giving the Seattle-based company a stock market valuation of $2.01 trillion. Its stock has risen 52% in the past 12 months, partly driven by enthusiasm for the company’s investments in artificial intelligence.
Amazon now joins Google’s parent company Alphabet, software giant Microsoft, iPhone maker Apple, and chip maker Nvidia among companies with valuations of at least $2 trillion.
Last week, Nvidia hit $3 trillion and briefly became the most valuable company on Wall Street. Nvidia’s chips are used to power many AI applications, and its valuation has soared as a result.
Amazon has also been making significant investments in AI as global interest in the technology has grown. Most of the focus has been on business-oriented products, including AI models and a chatbot called Q, which Amazon offers to businesses that use its cloud computing unit, AWS.
“A big part of the valuation boost has been cloud and AI,” said Wedbush tech analyst Dan Ives.
“Amazon is going to be a major player in the AI revolution.”
In April, Amazon CEO Andy Jassy stated that AI capabilities have reignited AWS’s growth, putting it on track for $100 billion in annual revenue. The unit’s growth had slowed last year as companies reduced costs amid high inflation.
Amazon has also invested $4 billion in the San Francisco-based AI company Anthropic to develop foundation models that support generative AI systems. Additionally, Amazon designs and manufactures its own AI chips.
Beyond its cloud business, Amazon has significantly reduced costs since late 2022, resulting in layoffs of over 27,000 corporate employees across multiple divisions. The company reported revenue and profits for the first quarter of the year, driven by growth in AWS, as well as its core retail business and advertising. These factors have bolstered investor confidence, according to Neil Saunders, Managing Director at GlobalData Retail.
“Certainly, there are downsides, but these are mostly external — such as the threat from the FTC,” Saunders said, alluding to the federal agency’s antitrust lawsuit against the company.
But, he said, “investors see these clouds as a long way off so they are not dampening the current valuation.”
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