Amazon surpasses $3trn market valuation for the first time

For the first time in history, e-commerce and cloud computing giant Amazon has surpassed a market valuation of $3 trillion, marking it as the fifth company to achieve this feat. The tech giant confirmed the milestone following a rise in its shares by approximately 5% on 3 August. Amazon had previously hit the $2 trillion market capitalization mark in June 2024, and reached the $1 trillion value benchmark in late 2018.

In its second fiscal quarter of 2026 results released on 30 July, Amazon reported a staggering 20% increase in net sales, year-on-year, reaching over $200 billion. Operating income saw a 43% increase, hitting $27.5 billion. AWS, the company's cloud infrastructure division, experienced a remarkable 37% year-over-year growth, with sales surging to $42.2 billion, marking the fastest growth in 18 quarters.

Andy Jassy, Amazon's president and CEO, expressed optimism about AWS's growth, stating that both the AI and chips businesses have each surpassed run rates of more than $25 billion, representing "triple-digit percentages" growth year-on-year. The surge in AWS's share prices can be attributed to the robust demand for cloud and chips solutions driven by AI.

Jassy projected capital expenditures for 2026 at $220 billion, up from the $200 billion estimate made in February and reaffirmed in April. Despite the increased investments, Jassy mentioned that the company will still face capacity constraints, and this limitation is expected to persist in 2027 and beyond. The company's free cash flow experienced an outflow of $7.6 billion over the preceding 12 months, compared to a $18.2 billion inflow for the same period in 2025.

Amazon has been investing heavily in AI, with a $25 billion commitment towards Anthropic, a significant AI startup, and a partnership with OpenAI to utilize AWS's Trainium capacity. The company also has collaborations with Nvidia rival Cerebras, Uber for Graviton and Trainium chips, and Meta for deploying tens of millions of AWS Graviton cores for AI workflows. Amazon has also been addressing its AI expenses through substantial workforce reductions, cutting about 16,000 jobs in January and another 14,000 in October.

Some analysts suggest that AWS could be designated as a 'gatekeeper' in the EU due to its dominant market position as the largest cloud computing service provider in Europe.