Amazon Inc. reached a market value of $2 trillion for the first time on Wednesday, joining as the fifth of an elite group of US companies exceeding this achievement.
The surge in valuation was driven by optimism surrounding artificial intelligence and expectations of potential interest rate cuts this year, bolstering demand for technology stocks.
The stock rose 3.4% to $192.70, boosting the e-commerce giant’s market value above $2 trillion and placing it alongside tech giants such as Microsoft Corp, Apple Inc., Nvidia Corp., and Alphabet.
US stock indexes have seen huge gains this year led by strong enthusiasm for AI, confidence in the resilience of the U.S. economy, and prospects of Federal Reserve interest rate adjustments.
Wall Street has approached record levels, largely driven by major stocks like Nvidia and Amazon, which stand to benefit from lower interest rates due to their substantial future cash flows.
Amazon, added to the blue-chip Dow Jones Industrial Average index (.DJI) in February, has seen its shares climb over 26% this year, becoming the fifth largest US company by market value after Nvidia’s recent ascent.
Amazon Web Services remains the world’s largest cloud services provider, with renewed growth driven by increased adoption of AI technologies following a previous downturn.
Added to this, Amazon has made investments in AI startup Anthropic and robotics firm Figure, aiming to capitalize on the burgeoning AI sector.
Late last year, Amazon unveiled a new generation of custom-designed chips for data centres, targeting applications in machine-learning training and generative artificial intelligence.
