Amazon’s market value breaches $2-trillion for the first time

Bengaluru — Amazon.com’s market value surpasses $2-trillion for the first time on Wednesday, becoming the fifth US company to surpass that level as optimism around artificial intelligence (AI) and potential interest rate cuts in 2024 drove demand for technology-related stocks.

The stock rose 3.4% to $192.70, giving the e-commerce giant a market value of more than $2-trillion and putting it in the same club as technology heavyweights Nvidia, Microsoft, Apple, and Alphabet.

US stock indices have recorded robust gains this year on relentless enthusiasm around AI, optimism about the resilience of the US economy and potential easing of interest rates from the Federal Reserve later this year.

Wall Street was trading near record levels, largely powered by megacap stocks such as Nvidia and Amazon, whose future cash flows stand to benefit from lower interest rates.

Shares of Amazon, which were added to the blue-chip Dow Jones industrial average index in February, have climbed over 26% this year. The company became the fifth biggest US company by market value in February after Nvidia went up a spot.

Amazon Web Services is the largest cloud services provider in the world, and growth at the Amazon unit has returned after a dip in the past year, thanks to surging adoption of AI technologies.

The company has also invested in AI start-up Anthropic and robotics firm Figure as it looks to capitalise on the AI boom.

Late last year, Amazon unveiled a new generation of custom-designed chips used in data centres, targeting applications for machine-learning training and generative artificial intelligence.

Reuters