Amazon have joined an elite club in being one of only 5 companies now valued at over $2 trillion dollars.
They hit the milestone as trading finished on Wednesday night, with Amazon stock up almost 4%, taking them to a $2.01 trillion market cap. Analysts believe this is due to increased profits and interest in AI.
Rise of Bezoz’s Personal Wealth
The news has also meant Jeff Bezoz’s net worth dramatically rose over the course of Wednesday. Bezoz is the founder and chairman of Amazon’s board.
He found his worth rise by $6 billion in the space of a single day, and now controls a $209 billion fortune.
Elon Musk Still Wealthier
Despite this rise, he remains second behind Elon Musk, currently the world’s wealthiest person.
Elon Musk, the CEO of Tesla and SpaceX, has a net worth of $219.2 billion.
Most Productive Quarter Ever
Amazon’s valuation comes after its most profitable quarter ever. The company reported a $10.4 billion net income in the first quarter of this year.
This is compared to a loss of $3.8 billion in the first quarter of 2022 and a profit of $3.2 billion in the first quarter of 2023.
Success Driven by AI
The success may have been partly driven by the success of Amazon Web Services, one of the most ubiquitous AI-driven services on the market.
Amazon Web Services are an on-demand cloud computing platform that has become widely used across the web and underpins many network services.
Tech Companies Dominate $2 Trillion Club
Amazon have joined an elite group of 5 companies that have reached the significant $2 trillion milestone.
Apple, Microsoft, Nvidia and Alphabet (Google’s parent) make up the rest of the top 5. This list demonstrates the dominance of tech companies in the current market.
Amazon Worth More Than Most Countries
If market valuation were measured alongside the GDP of countries, Amazon would rank as the 13th biggest country in the world.
Their $2.01 trillion market cap puts them just below Mexico on $2.02 trillion and above Australia on $1.79 trillion, according to IMF figures.
Tech Companies’ Rise in the Age of AI
Many of the top tech companies have experienced similarly successful periods in the past year or more.
Last week, Nvidia became the most valuable company in the world for a short period, valued as high as $3 trillion.
Amazon Lay-Offs Contributed to Higher Valuation
Another reason for Amazon’s increasing profit margin is the increased number of lay-offs they’ve been making since 2022.
Since the end of 2022 period, they have laid off more than 27000 employees in their corporate divisions, which boosts investor sentiment.
Amazon’s AI Investments Paying Off
Amazon’s AI investments are a partial explanation for their recent successes in the stock market.
They have invested $4 billion in Anthropic, an AI company that builds ‘foundational models’ for generative AI products.
