Amazon joined the exclusive $2 trillion club Wednesday after Wall Street investors pushed the value of the e-commerce giant's stock past that threshold.
Shares in Amazon.com Inc. finished the day up almost 4%, giving the Seattle-based company a stock market valuation of $2.01 trillion. Its stock has gained 52% in the past 12 months, partly driven by enthusiasm for the company's investments in artificial intelligence.
Amazon now joins Google's parent Alphabet, software behemoth Microsoft, iPhone maker Apple and chip maker Nvidia among companies with valuations of at least $2 trillion.
Last week, Nvidia hit $3 trillion and briefly became the most valuable company on Wall Street. Nvidia's chips are used to power many AI applications and its valuation has soared as a result.
Amazon has also been making big investments in AI as global interest has grown in the technology. Most of the focus has been on business-focused products, including AI models and a chatbot called Q, which Amazon makes available to businesses that use its cloud computing unit AWS.
"A big part of the valuation boost has been cloud and AI," said Wedbush tech analyst Dan Ives. "Amazon is going to be a major player in the AI revolution."
In April, Amazon CEO Andy Jassy said that AI capabilities have reaccelerated AWS' growth and that it was on pace for $100 billion in annual revenue. The unit's growth slowed last year as companies cut down on costs amid high inflation.
Amazon has also invested $4 billion in the San Francisco-based AI company Anthropic to develop so-called foundation models that underpin generative AI systems. In addition, Amazon makes and designs its own AI chips.
Outside of its cloud business, Amazon has cut costs significantly since late 2022, laying off more than 27,000 corporate employees across several divisions. It reported revenue and profits for the first quarter of the year, aiding by growth in AWS as well as its core retail business and advertising. All those things are boosting investor sentiments, said Neil Saunders, the managing director at GlobalData Retail.
"Certainly, there are downsides, but these are mostly external — such as the threat from the FTC," Saunders said, alluding to the federal agency's antitrust lawsuit against the company.
But, he said, "investors see these clouds as a long way off so they are not dampening the current valuation."
Google is blasted by UK watchdog for what it calls anti-competitive behavior through digital ads
Google was slammed Friday by U.K. regulators who say it's taking advantage of its dominance in digital advertising to thwart competition in Britain, ratcheting up pressure that the tech giant is facing on both sides of the Atlantic over its "ad tech" business practices.
Britain's Competition and Markets Authority said that the U.S. company gives preference to its own services to the detriment of online publishers and advertisers in Britain's 1.8 billion pound ($2.4 billion) digital ad market. The watchdog leveled its accusations after an investigation, and the findings could potentially lead to a fine worth billions of dollars or an order to change its behavior.
Google is a major player throughout the digital ad ecosystem, providing servers for publishers to manage ad space on their websites and apps, tools for advertisers and media agencies to buy display ads, and an exchange where both sides come together to buy and sell ads in real time at auctions.
"We've provisionally found that Google is using its market power to hinder competition when it comes to the ads people see on websites," the watchdog's interim executive director of enforcement, Juliette Enser, said in a press release.
The watchdog's charges, known as a statement of objections, arrive two years after it opened its investigation. Google's digital ad business is also the focus of a European Union antitrust investigation and a U.S. Justice Department lawsuit that's set to go to trial this month.
The CMA said that Google's "anti-competitive" conduct is ongoing, but the company disputed the allegations Friday.
"Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector," the company said in a prepared... Read More