Amazon has become the fifth company to cross the $3 trillion market value milestone as strong AWS growth, robust AI demand and upbeat earnings fuelled a record rally in its shares. Here’s what’s driving the surge
Amazon has crossed a major Wall Street milestone, becoming only the fifth company in history to surpass a market capitalisation of $3 trillion. The achievement comes after a sharp rally in the e-commerce and cloud computing giant’s shares, driven by stronger-than-expected earnings and growing investor confidence that its massive artificial intelligence (AI) investments are beginning to pay off.
The company’s shares rose around 5 per cent on Monday to hit a record high, lifting its market value above the $3 trillion mark for the first time. The stock has gained more than 23 per cent so far this year, making Amazon one of the best-performing members of the so-called “Magnificent Seven” group of large US technology companies.
AWS and AI emerge as the biggest growth engines
The latest rally gathered momentum after Amazon reported its second-quarter earnings last week. Investors cheered the company’s strongest cloud computing growth in more than four years, with Amazon Web Services (AWS) posting its fastest revenue expansion since 2021.
The company also raised its annual capital expenditure forecast, signalling that it plans to continue investing aggressively in AI infrastructure, including data centres and advanced computing capacity.
AWS has become Amazon’s main profit engine. As businesses race to adopt generative AI applications, demand for cloud infrastructure, AI chips and computing power has surged. Amazon has strengthened its position through partnerships with companies such as OpenAI, Anthropic and Meta, boosting demand for its cloud services.
More from BusinessInvestor fears over AI spending begin to ease
For much of this year, investors worried that heavy spending on AI infrastructure by Big Tech could hurt profitability. Amazon’s latest earnings, however, suggested that demand for AI-powered cloud services is growing fast enough to justify those investments.
The upbeat results also lifted sentiment across the broader technology sector. Shares of Microsoft, Meta Platforms, Alphabet and Oracle climbed on Monday as investors viewed Amazon’s earnings as another sign that the AI investment cycle remains intact.
Market strategists say the latest earnings season has also changed how investors are looking at the biggest technology companies. Rather than treating the “Magnificent Seven” as a single group, markets are increasingly rewarding companies that can show clear returns on their AI spending.
A remarkable turnaround for the stock
Amazon’s latest milestone comes after a volatile few months. The stock had fallen nearly 18 per cent between its record high in May and a three-month low reached last month as concerns mounted over AI-related spending.
Those fears eased after the company’s earnings report. Amazon’s shares recorded their biggest one-day jump since 2012 following the results, adding nearly $400 billion in market value in a single trading session.
Despite the recent rally, Amazon’s valuation remains below its long-term historical average on a forward earnings basis, suggesting investors still see room for further gains if earnings continue to improve.
Joining one of Wall Street’s most exclusive clubs
Amazon now joins Nvidia, Microsoft, Alphabet and Apple as the only companies to have crossed the $3 trillion market value milestone. Nvidia remains the world’s most valuable listed company, with a market capitalisation approaching $5 trillion as demand for AI chips continues to surge.
The pace of Amazon’s growth has also accelerated. It took the company just over two years to move from a $2 trillion valuation, first achieved in June 2024, to $3 trillion. By comparison, it took more than six years to grow from a $1 trillion valuation to the $2 trillion mark.
Can the rally continue?
Wall Street remains optimistic about Amazon’s prospects. Analysts expect AWS to remain the company’s biggest earnings driver as enterprises continue shifting workloads to the cloud and investing in AI applications.
According to Bloomberg data, the average analyst price target still implies further upside for Amazon’s shares over the next 12 months.
For investors, Amazon’s $3 trillion milestone reflects more than just a rising share price. It signals growing confidence that the company’s massive AI investments are translating into stronger cloud demand, higher earnings and a more durable long-term growth story.
