An Amazon Prime truck on April 5, 2024 in Portland, Oregon.
Jenny Kane/AP/Associated Press
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Jenny Kane/AP/Associated Press
NEW YORK (AP) — Amazon joined the exclusive $2 trillion club on Wednesday after Wall Street investors pushed the e-commerce giant’s stock value above the $2 trillion threshold.
Shares of Amazon.com Inc. ended the day nearly 4% higher, giving the Seattle-based company a stock market valuation of $2.01 trillion. Its shares have risen 52% in the past 12 months, driven in part by the company’s enthusiasm for investing in artificial intelligence.
Amazon now joins Google parent Alphabet, software giant Microsoft, iPhone maker Apple and chipmaker Nvidia among other companies with valuations of at least $2 trillion.
Last week, Nvidia’s market value exceeded US$3 trillion, once becoming the most valuable company on Wall Street. Nvidia’s chips are used to power many artificial intelligence applications, and its valuation has soared as a result.
As global interest in artificial intelligence technology grows, Amazon has also been investing heavily in the field of artificial intelligence. Much of the focus has been on business-focused products, including artificial intelligence models and a chatbot called Q, which Amazon makes available to businesses using its cloud computing arm, AWS.
“A big part of the valuation increase is cloud and artificial intelligence,” said Wedbush technology analyst Dan Ives. “Amazon will be a major player in the artificial intelligence revolution.”
In April this year, Amazon CEO Andy Jassy said that artificial intelligence capabilities have re-accelerated the growth of AWS, with annual revenue expected to reach $100 billion. Growth in the sector slowed last year as companies cut costs amid high inflation.
Amazon also invested $4 billion in Anthropic, a San Francisco-based artificial intelligence company, to develop so-called basic models that underpin generative artificial intelligence systems. In addition, Amazon also manufactures and designs its own artificial intelligence chips.
In addition to its cloud business, Amazon has also significantly cut costs since the end of 2022, laying off more than 27,000 corporate employees in multiple departments. The company reported first-quarter revenue and profit, driven by growth in AWS and its core retail business and advertising. Neil Saunders, managing director of GlobalData Retail, said all of these factors were boosting investor sentiment.
“Of course, there are downsides, but those are mostly external — like threats from the Federal Trade Commission,” Sanders said, alluding to the federal agency’s antitrust lawsuit against the company.
But, he said, “Investors believe these clouds are far away, so they won’t undermine current valuations.”
