Amazon enters $3 trillion club as AI, cloud growth power rally

Amazon reached a market value of $3 trillion for the first time on Monday, driven by a surge after strong earnings and the growing demand for its cloud computing services due to the AI boom. The company's shares closed up 5% at $285.01, reaching a record high and up over 23% for the year. Last week, the shares experienced the biggest one-day jump since April 2012 following Amazon's strongest cloud growth in over four years and an increase in its annual capital spending forecast.

Industry experts, like Mark Hackett, chief market strategist at Nationwide, noted that Amazon, Microsoft, Meta Platforms, Alphabet, and Oracle have become the "hype-scalers" whose strong performance in AI has broken the market's skepticism. Microsoft and Meta Platforms also saw their shares climb by 4% and 6%, respectively, while Alphabet experienced a 3.6% increase and Oracle saw a 5% rise.

However, Tesla, Alphabet, and Meta faced negative cash flows for the last quarter, signaling different outcomes for these major players in the technology sector.

Since 1994, Amazon has taken just over two years to add another trillion dollars to its market value, following its $2 trillion valuation milestone in June 2024. Amazon Web Services has benefited from expanding partnerships, including cloud infrastructure and chip supply deals with OpenAI, Anthropic, and Meta.