Amazon joins an exclusive club, surpassing $2 trillion in stock market value for the first time

NEW YORK — 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. stock ended the day up almost 4%, giving the Seattle-based company a stock market valuation of $2.01 trillion. Shares have gained 52% over the past 12 months, driven in part 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 valued at least $2 trillion.

Last week, Nvidia hit $3 trillion and briefly became the most valuable company on Wall Street. Nvidia chips are used to power many AI applications, and as a result, their valuation has skyrocketed.

Amazon is also making big investments in artificial intelligence as global interest in the technology grows. The biggest focus was on business products, including artificial intelligence models and a chatbot called Q that Amazon makes available to companies that use its AWS cloud computing unit.

“Cloud and artificial intelligence were a big part of the valuation increase,” said Dan Ives, Wedbush technology analyst. “Amazon will be a major player in the AI ​​revolution.”

In April, Amazon CEO Andy Jassy said that AI capabilities were once again accelerating AWS’s growth and that it was reaching $100 billion in annual revenue. The unit’s growth slowed last year as companies cut costs in the face of high inflation.

Amazon also invested $4 billion in San Francisco-based AI company Anthropic to develop so-called foundational models that underpin generative AI systems. Amazon also manufactures and designs its own AI chips.

Outside of its cloud business, Amazon has cut costs significantly since late 2022, laying off more than 27,000 corporate workers across several divisions. The company announced revenues and earnings for the first quarter of the year, led by the growth of AWS and its core retail and advertising businesses. All this is improving investor sentiment, said Neil Saunders, managing director of GlobalData Retail.

“Of course there are disadvantages, but they are mainly external, such as the threat from the FTC,” Saunders said, referring to the antitrust lawsuit filed by the federal agency against the company.

But he added that “investors view these clouds as very distant, so they do not undermine the current valuation.”