Amazon hits US$2 trillion in value as AI frenzy fuels tech stocks

The company is now a member of an elite club of a handful of peers that have surpassed the key market capitalisation

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A delivery worker moves Amazon packages in New York. Photo: Bloomberg

Published: 10:32am, 27 Jun 2024

Amazon.com has reached a US$2 trillion market valuation for the first time ever, as an artificial intelligence (AI)-fuelled rally pushed the tech giant deeper into record territory.

Shares rose 3.9 per cent on Wednesday to close at US$193.61, pushing the market value to more than US$2 trillion. The company is now a member of an elite club of a handful of peers that have surpassed the key market capitalisation.

Alphabet passed the US$2 trillion threshold in late April, while rallies have pushed market values of Nvidia, Microsoft and Apple to more than US$3 trillion.

Amazon shares have whipsawed since the company’s first-quarter earnings, when the cloud unit posted the strongest sales growth in a year, helping to power the stock back above the all-time high set in April. The stock rallied in June, recovering losses from the end of May to gain 27 per cent so far this year.

Shares of the mega-cap technology company have got a lift over the past year as the company cut costs and restructured its business to better take advantage of the AI frenzy. In addition, its key Amazon Web Services business has shown signs of re-accelerating growth, a major point of optimism for investors.

“Part of the good stock performance over the last six to nine months for Amazon has been related to the fact that it was oversold” at the end of 2022, said Dan Romanoff, an analyst at Morningstar Investment Service.