- Amazon’s shares gained 3.9 per cent to push the company’s stock to $2 trillion
- The milestone is attributable to significant investments in AI, cloud business and cost-cutting measures
- With the new stride, Amazon will be looking to join the likes of Nvidia, Microsoft and Apple in the $3 trillion club
Amazon, America’s multinational technology company, has joined the $2 trillion stock valuation club owing to investment in Artificial Intelligence (AI), becoming the fifth tech company to reach the threshold after Alphabet, Nvidia, Microsoft and Apple.
The company’s shares increased to 3.9 per cent on Wednesday, June 26, to close at $193.61, leading to a market value of $2.01 trillion.
In the last 12 months, Amazon’s stocks had gained 52 per cent market value, driven by investments in AI. These investments have been in business-focused products like AI models and its chatbox, Q, which was launched in November 2023, powered by generative AI to support businesses using its cloud computing division, Amazon Web Services (AWS).
Stride attributed to big investments in AI, cloud business, cost-cutting and restructuring moves
Sales growth in AWS, which came to $25.04 billion in the first quarter of 2024, the highest in a year for the first quarter, is said to have contributed to Amazon’s stock performance.
The company’s cloud computing unit recorded 17 per cent growth year-on-year, higher than analysts had predicted, and 13 per cent higher than what the company reported in the fourth quarter of 2023.
Amazon’s CEO, Andy Jassy, said with AI integration, AWS is set to reach $100 billion in annual revenue, although the unit’s growth slowed down due to cut-downs on cloud resources spending by businesses amid high inflation.
The company also invested $4 billion in AI startup, Anthropic, in a race to tap into the offerings in the latest technology. It aims to develop foundation models that power generative AI systems in addition to making and developing its own AI chips.
To compete with AI chatbots from Google, Microsoft and OPenAI, Amazon plans to revamp its voice assistant, Alexa, into a much smarter personal assistant.
It plans to integrate conversational generative AI in an initiative named ‘Project Bayan’ to enable Alexa to replicate human mannerisms in its understanding and response to complex questions and prompts.
Jassy set an internal deadline for the launch of Alexa’s new version for August in a letter to shareholders in April wherein he promised a “more intelligent and capable Alexa.”
Beyond its investments in AI and cloud, since late 2022, Amazon has taken significant steps to cut down costs and shore up revenue, which included laying off more than 27,000 corporate employees across several divisions.
Amazon races to join $3 trillion valuation stocks
Having reached the $2 trillion milestone and its significant investments in AI, Amazon will be looking at joining the likes of Nvidia, Microsoft and Apple that have reached $3 trillion mark.
On June 18, Nvidia reached $3.334 trillion, becoming the most valuable company in the S&P 500 after crossing the $1 trillion mark only a year ago.
The company’s investment in chips or semiconductors used to power many AI applications has boosted its revenue.
Nvidia edged out Microsoft, valued at $3.317 and Apple, the third most valuable company with $3.286 trillion valuation.
“APC Impact?” Nigeria’s economy drops to 4th largest in Africa, loses $315.8bn in 10 years
Meanwhile, TheRadar reported that Nigeria’s economy lost $315.8 billion in the 10 years between 2014 and 2024. It fell from being the first largest economy in Africa to the fourth in the 10-year period.
Between 2023 and April 2024, Nigeria lost an estimated $122.2 billion, dropping from third to the fourth largest economy in Africa.
