Amazon joins exclusive club and crosses the $2 trillion mark for the first time

NEW YORK – Amazon joined the exclusive $2 trillion club on Wednesday after Wall Street investors pushed the e-commerce giant’s stock value above that threshold.

Amazon.com Inc. shares ended the day up nearly 4 percent, giving the Seattle-based company a market valuation of $2.01 trillion. The stock has gained 52 percent over the past 12 months, partly on enthusiasm for the company’s investments in artificial intelligence.

Amazon joins Google’s parent company Alphabet, software giant Microsoft, iPhone maker Apple and chip maker Nvidia in the group of companies valued at least $2 trillion.

Last week, Nvidia hit the $3 trillion mark and briefly became the most valuable company on Wall Street. Nvidia’s chips are used in many AI applications, and the company’s valuation has skyrocketed as a result.

Amazon has also made major investments in artificial intelligence as global interest in the technology has grown, focusing on business-focused products including AI models and a chatbot called Q, which Amazon makes available to companies using its cloud computing unit AWS.

“A lot of the increase in value is due to cloud and AI,” said Dan Ives, technology analyst at Wedbush. “Amazon will be a major player in the AI ​​revolution.”

In April, Amazon CEO Andy Jassy said that AI capabilities had re-accelerated AWS’ growth and that the company was on track to hit $100 billion in annual revenue. The division’s growth slowed last year as companies cut costs amid high inflation.

Amazon has also invested $4 billion in San Francisco-based AI company Anthropic to develop so-called base models that support generative AI systems. In addition, Amazon manufactures and develops its own AI chips.

Outside of its cloud business, Amazon has cut costs significantly since the end of 2022 and laid off more than 27,000 employees across multiple departments. The company reported revenue and profit for the first quarter of the year, boosted by growth at AWS as well as its core retail and advertising businesses. All of these things are lifting investor sentiment, said Neil Saunders, managing director of GlobalData Retail.

“There are certainly downsides, but they are largely external in nature – such as the threat from the FTC,” Saunders said, referring to the federal agency’s antitrust lawsuit against the company.

However, he said: “Investors believe these clouds are still far away, so they do not dampen the current valuation.”