Amazon hits $2 trillion in stock market value for first time: NPR

Amazon hits  trillion in stock market value for first time: NPR

An Amazon Prime truck is seen on April 5, 2024 in Portland, Oregon.

Jenny Kane/AP/AP

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Jenny Kane/AP/AP

NEW YORK (AP) — Amazon joined the exclusive $2 trillion club on Wednesday after Wall Street investors pushed the value of the e-commerce giant’s shares beyond that threshold.

Shares of Inc. ended the day up nearly 4%, giving the Seattle-based company a market valuation of $2.01 trillion. Its stock has gained 52% over the past 12 months, driven in part by enthusiasm over the company’s investments in artificial intelligence.

Amazon now joins Google parent Alphabet, software giant Microsoft, iPhone maker Apple and chipmaker Nvidia among companies valued at at least $2 trillion.

Last week, Nvidia hit $3 trillion and briefly became the most valuable company on Wall Street. Nvidia’s chips are used to power many AI applications and as a result their valuation has skyrocketed.

Amazon has also made significant investments in AI as global interest in the technology has grown. The focus has been primarily on enterprise-facing products, including AI models and a chatbot called Q, which Amazon makes available to businesses using its AWS cloud computing unit.

“A lot of the increase in valuation is due to cloud and AI,” said Dan Ives, technology analyst at Wedbush. “Amazon is going to be a major player in the AI ​​revolution.”

In April, Amazon CEO Andy Jassy said AI capabilities had re-accelerated AWS’s growth and that it was on track to generate $100 billion in annual revenue. The unit’s growth slowed last year as companies cut costs amid high inflation.

Amazon also invested $4 billion in San Francisco-based AI company Anthropic to develop so-called core models that support generative AI systems. Additionally, Amazon manufactures and designs its own AI chips.

Outside of its cloud business, Amazon has significantly cut costs since late 2022, laying off more than 27,000 employees across multiple divisions. It reported revenue and profit for the first quarter of the year, supported by AWS’ growth as well as its core retail and advertising businesses. All of these are boosting investor sentiment, said Neil Saunders, managing director of GlobalData Retail.

“Certainly there are downsides, but they’re mostly external, like the threat from the FTC,” Saunders said, referring to the federal agency’s antitrust lawsuit against the company.

But, he added, “investors see these clouds as distant and therefore they do not dampen the current valuation.”

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