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Amazon's "big gamble on AI" shows early returns, with a market value approaching $3 trillion

Investors are increasingly optimistic about Amazon's AI strategy. Driven by expectations for AI, Amazon's stock price continues to rise, with a market cap now reaching $2.9 trillion (Note: approximately 19.72 trillion RMB at current exchange rates), getting closer to the $3 trillion mark.

Stephen Lee, founder of Logan Capital Management, which holds Amazon stock, said, "We are very confident that Amazon's AI strategy is working and will continue to deliver strong returns in the coming years."

Since hitting a bottom on March 27, Amazon's stock price has risen 36%, making it the fourth-largest contributor to the S&P 500 index's gains. As of Wednesday's close, the S&P 500 had increased 17% over the same period, with 7.4% of that gain coming from Amazon. In April alone, Amazon's stock surged 27%, its best monthly performance since 2007. On Thursday, Amazon's stock price fell 0.3%.

This year, Amazon's market value has increased by $432 billion, now reaching $2.9 trillion. If the stock price continues to rise, Amazon will join Nvidia, Alphabet, Apple, and Microsoft as one of the few companies with a market cap exceeding $3 trillion.

Before this rally, Amazon experienced a prolonged period of underperformance. Over the past five years, Amazon's stock price has increased 65%, significantly below the 121% gain of the tech-heavy Nasdaq 100 index during the same period, and also below the 79% increase in the S&P 500.

The rebound in stock price indicates that investors are reassessing Amazon's AI opportunities and believe Amazon has more than one path to benefit from AI. Latest earnings reports show that Amazon Web Services (AWS) has experienced its fastest quarterly sales growth in over three years, indicating strong demand for AI. Amazon also stated that, regarding its custom AI chips around Trainium, it has "more than $225 billion in revenue commitments." $AMZN