(New York) Amazon joined the exclusive club of US 2 trillion in market capitalization on Wednesday after Wall Street investors pushed the value of the e-commerce giant’s shares beyond that threshold.
Shares of Amazon.com ended the day up nearly 4%, giving the Seattle-based company a market valuation of $2,010 billion. Its stock has gained 52% over the past 12 months, driven in part by enthusiasm over the company’s investments in artificial intelligence.
Amazon now joins Google parent Alphabet, software giant Microsoft, iPhone maker Apple and chipmaker Nvidia among companies valued at at least US$2 trillion.
Last week, Nvidia reached US$3 trillion and briefly became the company with the largest market capitalization on Wall Street. Nvidia’s chips are used to power many AI applications and as a result their valuation has skyrocketed.
Amazon has also made significant investments in AI as global interest in the technology has grown. The focus has been primarily on enterprise-grade products, including AI models and a chatbot called Q, which Amazon makes available to businesses using its AWS cloud unit.
“A lot of the increase in valuation is due to cloud computing and AI,” said Dan Ives, technology analyst at Wedbush. Amazon is going to be a major player in the AI revolution. »
In April, Amazon CEO Andy Jassy said AI capabilities had re-accelerated AWS’ growth and that it was on track to generate US$100 billion in annual revenue. The unit’s growth slowed last year as companies cut costs amid high inflation.
Amazon also invested $4 billion in San Francisco-based AI company Anthropic to develop so-called core models that support generative AI systems. Additionally, Amazon manufactures and designs its own chips.
Outside of its cloud business, Amazon has significantly cut costs since late 2022, laying off more than 27,000 employees across multiple divisions.
“Certainly there are headwinds, but they are mostly external, like the threat from the FTC (Federal Trade Commission),” said Neil Saunders, managing director of GlobalData Retail, referring to the antitrust suit filed by the federal agency.
But, he added, “investors perceive these winds as being distant and therefore they do not slow down the current valuation”.