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

NEW YORK (AP) — Amazon joined the exclusive $2 trillion club on Wednesday after Wall Street investors pushed the value of the e-commerce giant’s shares 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 Reached 3 trillion dollars and briefly became the most valuable company on Wall Street. Nvidia’s chips are used for many AI applications and their value has skyrocketed as a result.

Amazon has also made major investments in AI as global interest in the technology has increased, focusing on business-oriented products, including AI models and a Chatbot named Q, that Amazon makes available to companies that use 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 US dollars at the San Francisco-based AI company Anthropic to develop so-called foundation models that support generative AI systems. In addition, Amazon manufactures and develops its own AI chips.

Outside of its cloud business, Amazon has significantly cut costs since the end of 2022 and laid off more than 27,000 employees in several departments. reported sales and profit for the first quarter of the year, helped 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 disadvantages, but these are mostly external in nature – like the threat from the FTC,” said Saunders, alluding to the federal authority’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.”