MYNORTHWEST NEWS

Amazon becomes fifth U.S. company to reach $2 trillion valuation, thanks to AI

Jun 27, 2024, 8:08 AM

amazon trillion...

A sign for an Amazon Go retail store is seen at the Amazon.com Inc. headquarters. (Photo: David Ryder, Getty Images)

(Photo: David Ryder, Getty Images)

Amazon reached a $2 trillion valuation after Wall Street investors pushed the retail giant’s stock past that elusive threshold Wednesday.

Amazon’s stock was up nearly 4% Wednesday, trading above $193 per share. Amazon’s stock has climbed 52% in the past 12 months, with experts citing the company’s significant investments in artificial intelligence as a reason for the stock’s growth.

Amazon joins Alphabet (Google’s parent company), Apple, Microsoft and Nvidia — all major technology companies based in the U.S. — as the fifth company to reach a $2 trillion valuation. Nvidia, which develops graphics processors had its market value soar from $2 trillion to $3 trillion in just over three months, joining Apple and Microsoft as companies that have reached a $3 trillion valuation.

More on Amazon: Amazon adds $1.4B to affordable housing fund for regions where it has corporate offices

It took Amazon more than four years to cross the $2 trillion milestone after reaching $1 trillion in 2020, according to CNBC. 2020 was the second time Amazon reached $1 trillion, first hitting the benchmark in 2018.

Amazon’s dive into AI

A key reason for the retailer’s stock to rise at this severity, according to financial experts, is fueled by strong gains in the company’s cloud computing unit and AI investments. Amazon is currently developing a consumer-focused AI chatbot that would compete with OpenAI’s ChatGPT. According to a report from Business Insider, the AI chatbot, code-named “Metis,” could be revealed later this year.

Metis would be accessed via web browser and is expected to be powered by a new foundational model.

Amazon CEO Andy Jassy, who is reportedly directly involved with Metis, has described Amazon’s AI strategy as three-layered: enabling customers to create new AI foundation models, helping them use existing foundation models and building AI applications, according to GeekWire.

According to a June 2024 research article from AiMultiple, more than 50 companies are deploying conversational AI in 2024.

More on Amazon: Amazon layoffs affect additional 9,000 positions in AWS, ads, Twitch

Frank Sumrall is a content editor at MyNorthwest. You can read his stories here and you can email him here.

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Amazon becomes fifth U.S. company to reach $2 trillion valuation, thanks to AI