Key facts
- Amazon's market capitalization reached $3 trillion for the first time.
- The company's stock hit a record high, trading up 3.1% at $279.
- Amazon's market value has increased by $432 billion this year.
- Strong demand for Amazon Web Services (AWS) and custom AI chips is driving growth.
- Amazon has made significant investments in AI companies such as Anthropic and OpenAI.
Amazon touched a $3 trillion market capitalization for the first time on Monday, joining a select group of Wall Street giants as renewed optimism surrounding artificial intelligence propelled technology stocks to new highs. The company's shares were last up 3.1% at $279, reaching a record high and extending its yearly gains to 17.5%.
Investors are increasingly confident in Amazon's artificial intelligence strategy, which has fueled the stock's surge. The company's market value now stands at $2.9 trillion, having added $432 billion this year. This milestone places Amazon alongside Nvidia, Alphabet, Apple, and Microsoft in the exclusive club of companies valued at over $3 trillion.
The stock's rebound follows a period of underperformance, with its 36% gain since March 27 making it a significant contributor to the S&P 500's advance. Amazon's 27% jump in April marked its strongest monthly performance since 2007.
Amazon's AI investments are seen as a key driver of its success. Its cloud computing division, Amazon Web Services (AWS), recently reported its fastest quarterly sales growth in over three years, indicating robust AI demand. Furthermore, the company has secured over $225 billion in revenue commitments for its custom AI chips, suggesting potential advantages in compute costs. Analysts highlight that AI proficiency will benefit not only AWS but also Amazon's e-commerce operations through improved logistics and ad targeting.
Amazon's strategic investments in AI companies like Anthropic PBC and OpenAI, which is expected to spend $100 billion on AWS over eight years, further bolster investor confidence. Wall Street's sentiment towards Amazon is overwhelmingly positive, with 79 out of 83 tracked analysts maintaining buy ratings.