NEW YORK (AP) โ Amazon joined the exclusive $2 trillion club on Wednesday after Wall Street investors pushed the e-commerce giant's stock value beyond that threshold.
Shares of Amazon.com Inc. ended the day up nearly 4%, giving the Seattle-based company a stock valuation of $2.01 trillion. Its shares have gained 52% over the past 12 months, partly driven by enthusiasm for the company's investments in artificial intelligence.
Amazon now joins Google parent Alphabet, software giant Microsoft, iPhone maker Apple and chipmaker Nvidia among companies with valuations of at least $2 trillion.
Last week, Nvidia reach 3 trillion dollars and briefly became the most valuable company on Wall Street. nvidia chips They are used to power many AI applications and, as a result, their valuation has skyrocketed.
Amazon has also been making big investments in AI as global interest in the technology has grown. Most of the attention has been on business-focused products, including artificial intelligence models and a chatbot called Q, that Amazon makes available to companies that use its AWS cloud computing unit.
"A big part of the valuation driver has been cloud and AI," said Wedbush technology analyst Dan Ives. "Amazon will be a major player in the AI โโrevolution."
In April, Amazon CEO Andy Jassy said that AI capabilities have reaccelerated AWS's growth and that it was on track to generate $100 billion in annual revenue. The unit's growth slowed last year as companies cut costs amid high inflation.
Amazon has also invested $4 billion at San Francisco-based AI company Anthropic to develop so-called core models that underpin generative AI systems. Additionally, Amazon manufactures and designs its own AI chips.
Outside of its cloud business, Amazon has significantly cut costs since late 2022, laying off more than 27,000 corporate employees across several divisions. He reported income and profits for the first quarter of the year, helped by growth in AWS, as well as its core retail and advertising business. All of those things are boosting investor confidence, said Neil Saunders, managing director at GlobalData Retail.
"There are certainly downsides, but they are mostly external, like the threat of the FTC," Saunders said, alluding to The federal agency's antitrust lawsuit against the company.
But, he said, "investors see these clouds as something very far away, so they are not affecting the current valuation."
