above $3 trillion

Shares of Amazon surged to a record high of over $3 trillion on Monday, marking its first time surpassing the trillion-dollar market cap following a stronger-than-anticipated earnings report last week. The company's market value reached its highest point since May 5, with shares closing up 4%. This significant jump was driven by a substantial surge in cloud growth during the second quarter, fueled by robust demand for artificial intelligence.

Amazon reported adjusted earnings per share of $1.97, surpassing estimates of $1.82 per share, while revenue reached $200.61 billion, exceeding the estimated $196.47 billion. The company's cloud division, Amazon Web Services, reported a revenue of $42.2 billion, outpacing analysts' expectations of $40.54 billion. CEO Andy Jassy attributed the growth to the company's AI buildout, which has led to increased capital expenditure, now projected at $220 billion for the year, up from the $200 billion estimate in February.

Despite this increase, Jassy acknowledged that the company would still face capacity constraints in meeting demand by 2026 and 2027, with demand already projected for 2028. Meanwhile, Amazon's cloud rivals, Microsoft Azure and Google Cloud, also experienced significant growth in their respective divisions, with Azure revenue increasing by 43% during the fiscal fourth quarter and Google Cloud reporting an 82% surge during their earnings report last week.