Amazon Joins the $3 Trillion Club

On Monday, Amazon’s market valuation surpassed $3 trillion for the first time thanks to a steep increase following impressive profits and indications that the AI boom is creating new demand for its cloud computing services, which are the company’s primary source of revenue.

At $285.01, its shares (AMZN.O), which opens a new tab, were last up 5%, reaching a record high. So far this year, they have increased by more than 23%.

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After the Seattle-based e-commerce and cloud computing behemoth reported its greatest cloud growth in over four years and increased its annual capital spending plan, the shares saw the largest one-day increase since April 2012 last week.

“At the moment, Amazon is arguably the most representative of the economy. “It’s both an AI story and a consumer story,” stated Mark Hackett, Nationwide’s chief market strategist.Before earnings season, there was a lot of doubt about whether hyperscalers were cutting back on AI spending. Amazon and Microsoft did not provide that, and it has given the market a considerably wider all-clear.

On Monday, shares of other hyperscalers increased as well. Alphabet (GOOGL.O) opens a new tab at 3.6%, Oracle (ORCL.N) opens a new tab at 5%, Microsoft (MSFT.O) opens a new tab at 4%, and Meta Platforms (META.O) opens a new tab at 6%.

Microsoft’s largest one-day share increase since 2008 was fueled by its announcement last week that it anticipates remaining cash-generative through fiscal 2027 and forecasting capital spending below Wall Street projections.

However, as the businesses proceeded to invest billions in AI buildouts, Tesla and Alphabet reported negative cash flows for the most recent quarter—the first time for Alphabet—while Meta suffered a 91% decline in free cash flow.

Other companies with a $3 trillion market valuation include Apple (AAPL.O), Microsoft, Alphabet, and Nvidia. With a market valuation of about $5 trillion, Nvidia is currently the largest corporation in the world.

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