Amazon joined the exclusive 2 billion (million) dollar club, after Wall Street investors ‘pushed’ the value of the e-commerce giant’s shares beyond that limit by first time.
Shares of Amazon.com Inc. ended the day Wednesday up nearly 4%, giving the Seattle-based company a stock market valuation of $2.01 billion. dollars.
Its shares have gained 52% in value over the past 12 months, partly driven by enthusiasm for the company’s investments in artificial intelligence (AI).
Amazon now joins Google parent company Alphabet, software giant Microsoft, iPhone maker Apple and chipmaker Nvidia among companies with valuations of at least $2 billion.
Last week, Nvidia hit 3 billion and briefly became the most valuable company on Wall Street.
Nvidia chips are used to power many AI applications and, as a result, their popularity has skyrocketed.
Amazon has also been making major investments in AI as global interest in the technology grows.
Most of the focus has been on business-oriented products, including AI models and a chatbot called Q, which Amazon makes available to companies using its AWS cloud computing unit.
“A big part of the valuation increase was cloud and AI. Amazon will be a major player in the AI revolution,” highlighted Dan Ives, technology analyst at Wedbush.
In April, Amazon CEO Andy Jassy highlighted that AI capabilities had rehabilitated AWS’s growth and that it was on track to reach $100 billion in annual revenue.
Unit growth slowed last year as companies cut costs due to high inflation.
Amazon also invested $4 billion in San Francisco-based AI company Anthropic to develop so-called core models that underpin generative AI systems. Additionally, Amazon 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 employees across multiple divisions.
The e-commerce giant reported revenue and profits in the first quarter of the year, helped by growth in AWS as well as its core business and advertising.
All of these factors are stimulating investor sentiment, highlighted Neil Saunders, director of GlobalData Retail.
“Certainly, there are disadvantages, but these are mainly external — like the threat from the Federal Trade Commission (FTC), “said Saunders, alluding to the ‘antitrust’ process. ) from the federal agency against the company.
But “investors consider that these clouds are very distant, so they are not harming the current valuation”, he guaranteed.
