By Rajwa Quasim
Amazon became the latest U.S. company to surpass a $3 trillion market valuation on Monday, reaching the milestone for the first time. It is the fifth company in history to do so, joining Apple, Microsoft, Nvidia and Alphabet. Shares of the e-commerce and cloud computing giant rose about 5% to $285.01, bringing the stock’s gain for the year to more than 23%.
The rally builds on momentum from last week, when Amazon shares surged 15% on Friday after the company reported quarterly results. Its cloud computing division, Amazon Web Services (AWS), posted its fastest growth in more than four years, easing investor concerns over the company’s massive AI infrastructure investments. Strong demand for AI services helped boost AWS revenue, while Amazon said it expects to spend about $200 billion on capital expenditures in 2026 alone.
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AI workloads require significantly more computing power than traditional applications, prompting Amazon to invest heavily in expanding its infrastructure. In its annual letter to shareholders, the company said it has already secured multiple agreements to utilize the additional computing capacity being built this year and in the years ahead.
AWS has also expanded partnerships with leading AI developers, including OpenAI, Anthropic and Meta. Amazon has agreed to invest up to $25 billion in Anthropic, while Anthropic has committed to spending more than $100 billion on AWS technologies over the next decade, including current and future generations of Trainium, Amazon’s custom AI chips.
The companies also announced that “Amazon Web Services (AWS) and OpenAI will co-create a Stateful Runtime Environment powered by OpenAI models, available on Amazon Bedrock for AWS customers to build generative AI applications and agents at production scale… Amazon will invest $50 billion in OpenAI.”
Amazon and Microsoft are the only two members of the “Magnificent Seven” that have so far won investor approval for their massive AI spending. By contrast, Tesla, Alphabet and Meta faced investor concerns after their heavy AI investments weighed on free cash flow in the latest quarter.
Founded by Jeff Bezos in 1994, Amazon took just over two years to add $1 trillion to its market value after first crossing the $2 trillion mark in June 2024.
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“Amazon is probably the most emblematic of the economy right now. It’s a consumer story and it’s an AI story,” Mark Hackett, chief market strategist at Nationwide, said. He added, “The big skepticism coming into earnings season was if they (hyperscalers) were turning the spigot down on spending on AI. We did not get that from Amazon and Microsoft and that has unleashed a much broader all-clear for the market.”
Meanwhile, Alphabet reported negative free cash flow for the first time, while Meta’s free cash flow fell 91% as both companies continued to invest billions of dollars in AI infrastructure and services. Nvidia remains the world’s most valuable company, with a market capitalization approaching $5 trillion.