Climbing to the top ranks of the world's largest corporations is no small feat. However, the efforts invested often yield immense returns. The company we're discussing experienced a decade of financial losses after its founding, finally turning a profit in 2003. Prior to that, the dot-com bubble had plummeted its stock from $113 to $5.50 per share. Yet, these challenges didn’t prevent Amazon from reaching a $2 trillion market cap just six years after achieving its first trillion-dollar milestone.
Relentless enthusiasm for AI and potential interest rate cuts this year are driving demand for technology-related stocks. This optimism, combined with economic resilience, propelled Amazon stock past the monumental $2 trillion milestone for the first time in its history.
Amazon shares surged by 3.9% in a single day, enabling the e-commerce giant to cross the threshold of the exclusive club. Amazon is now the fifth company to hit this lofty benchmark, alongside Apple, Microsoft, Nvidia, and Alphabet. Notably, Microsoft, Apple, and Nvidia are the only three companies that have crossed the $3 trillion mark so far.
Last week, Nvidia briefly became the most valuable company on Wall Street by hitting $3 trillion, thanks to its chips that power numerous AI applications. As global interest in AI has grown, Amazon has also made significant investments in the technology. Shares of the mega-cap technology company have got a lift of nearly 30% over the year as the company cut costs and restructured its business to capitalize on the AI frenzy.
Amazon Web Services (AWS), the world's largest cloud services provider, has seen growth rebound after a dip last year, driven by the increasing adoption of AI technologies. Additionally, Amazon has invested in AI startup Anthropic and robotics firm Figure to leverage the AI boom further. Late last year, Amazon introduced a new generation of custom-designed chips for data centers aimed at machine-learning training and generative AI applications.
From its humble beginnings in a basement, Amazon has grown into a formidable force in e-commerce and cloud computing. In 2023, Amazon reported $575 billion in revenue, ranking second only to Walmart's staggering $639 billion.
All of the aforesaid begs the question: How much would you have now if you had invested $1,000 in Amazon in 1999 instead of being two years old?
