Amazon surpasses $3 trillion valuation as AI and cloud propel shares

Investing.com -- Shares of Amazon.com Inc. climbed past a historic milestone on Monday, surpassing $3 trillion in market value as investors cheered a blowout second-quarter earnings report that underscored the company’s accelerating dominance in cloud computing and artificial intelligence.

The stock surged 5% in morning trading to touch a new 52-week high of $287.20. The rally, buoyed by a wave of Wall Street upgrades, vaults the Seattle-based e-commerce and technology giant deeper into the elite club of mega-cap companies.

Underpinning the market enthusiasm was a quarterly performance that broadly defied expectations. Amazon reported second-quarter revenue of $200.6 billion, a 20% increase from a year earlier.

The primary engine behind the surge was Amazon Web Services (AWS). The closely watched cloud-computing division saw revenue jump 36.7% year-over-year, marking its fastest pace of expansion in 18 quarters. AWS now operates at an annualized revenue run rate of $169 billion, bolstered by a swelling contract backlog that reached $496 billion.

Wall Street analysts moved swiftly to adjust their models in the wake of the print. Morgan Stanley, RBC Capital, Roth Capital, and Telsey Advisory all raised their price targets, pointing to accelerating cloud demand and the tangible monetization of generative AI. Analysts at BNP Paribas reiterated their bullish stance, outlining a long-term trajectory for AWS to independently reach a $1 trillion valuation.

Cementing its position in the fiercely competitive AI landscape, Amazon also disclosed a massive $35 billion commitment to OpenAI. The investment deepens Amazon’s footprint in the AI ecosystem and served as a powerful signal to investors regarding the company’s aggressive, capital-intensive growth strategy.

Amazon’s ascent rippled across the broader technology sector, lifting fellow hyperscalers as the robust cloud results quelled lingering market anxieties over the return on invested capital for AI infrastructure. Shares of Microsoft Corp. advanced 5% in morning trading, while Google parent Alphabet Inc. gained 4.6%.

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