Amazon hits $3 trillion valuation as AI-driven cloud growth accelerates

Amazon’s market capitalisation surpassed $3 trillion for the first time on Monday, joining an exclusive group of technology giants to reach the milestone.

The achievement comes as investors reward the company for its strongest cloud computing growth in more than four years and a higher annual capital spending forecast, reinforcing confidence that its aggressive AI investments are translating into stronger financial performance.

Amazon now joins Apple, Microsoft, Alphabet and Nvidia as the only companies to have crossed the $3 trillion valuation mark, with Nvidia remaining the world’s most valuable company at nearly $5 trillion.

What the numbers show

Amazon’s $3 trillion market capitalisation was driven by a 5.5% jump in its share price to a record high of $286.20 on Monday, according to Reuters.

Earlier, the company’s shares surged 15% on Friday following its earnings release before extending gains on Monday, taking the stock’s year-to-date advance to more than 23%.

• Amazon’s strong performance shows that its AI spending has visibly translated into revenue growth in a way that has not yet materialised for some rivals.
• The milestone came just two years after Amazon first hit a $2 trillion valuation in June 2024, making it one of the fastest trillion-dollar additions in the company’s history.
• Amazon and Microsoft are the only two of the so-called Magnificent Seven companies, out of the six that have reported earnings so far, whose AI spending has been rewarded by investors, according to Reuters.

Amazon’s cloud computing division, AWS, is the company’s primary profit engine, and the acceleration in its growth rate has been directly linked by the company to rising demand from enterprises building and deploying AI applications at scale.

More insights

Amazon has been among the most aggressive of the large technology companies in building out AI infrastructure, committing tens of billions of dollars to the sector across multiple investment fronts.

• The company disclosed a new investment in Anthropic in April, following an earlier announcement this year that it would invest up to $50 billion in OpenAI, making Amazon a major financial backer of the two leading AI model companies simultaneously.
• The heavy investment in artificial intelligence is beginning to pay off for the company.
• But, Amazon is not the only technology giant beginning to see investor confidence return as its AI spending translates into stronger financial performance.
• Last month, Nairametrics reported that Microsoft added nearly $450 billion in market value in a single trading session after reporting stronger-than-expected quarterly results, robust Azure cloud growth and continued cash generation.

This helped to ease investor concerns that its heavy AI infrastructure investments would fail to generate meaningful returns.

• Last year, Nairametrics reported that Nvidia became the first company to hit the $5 trillion valuation mark, riding on the back of soaring demand for its AI processors from cloud providers.

The rally underscored Nvidia’s transformation from a gaming chip manufacturer into the dominant force powering the global artificial intelligence boom.

Together, the performances of Amazon, Microsoft, and Nvidia suggest public markets are becoming more willing to reward companies that can demonstrate a clear commercial payoff from their AI investments.

What you should know

The development comes weeks after Amazon cut jobs within its Artificial General Intelligence (AGI) division in July.

The decision marked another round of layoffs as the tech giant continues to streamline operations while prioritising investments in artificial intelligence.

The job cuts affected parts of Amazon’s AGI organisation, and follow a broader restructuring exercise in January, when Amazon eliminated about 16,000 roles across its business.