Amazon reached a market value of USD 2 trillion for the first time on Wednesday. This accomplishment places Amazon among an elite group of US companies, including Microsoft Corp, Apple, Nvidia, and Alphabet, that have surpassed the USD 2 trillion mark.
The e-commerce giant’s stock climbed by 3.4 per cent, closing at USD 192.70, driven by investor enthusiasm surrounding artificial intelligence (AI) advancements and potential interest rate cuts this year.
The impressive growth in Amazon’s stock value is a reflection of broader market trends. US stock indexes have experienced big gains in 2023, fueled by relentless optimism around AI, a resilient US economy, and the anticipation of easing interest rates from the Federal Reserve.
Megacap stocks like Nvidia and Amazon have played a significant role in powering Wall Street to near-record levels, benefiting from the prospect of lower interest rates which enhance future cash flows.
Amazon’s inclusion in the blue-chip Dow Jones Industrial Average index in February marks a significant milestone, with its shares rising more than 26 per cent this year. The company ascended to become the fifth-largest US firm by market value in February, following Nvidia’s climb in the rankings.
Key to Amazon’s growth has been the performance of Amazon Web Services (AWS), the world’s largest cloud services provider. After experiencing a dip last year, AWS has rebounded strongly thanks to the surging adoption of AI technologies.
In addition to its cloud services, Amazon has strategically invested in AI startups and technologies. The company has backed AI startup Anthropic and robotics firm Figure, aiming to capitalise on the AI boom. Last year, Amazon introduced a new generation of custom-designed chips for data centres, targeting machine-learning training and generative AI applications.
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