Amazon Stock Surges Toward $3 Trillion Market Valuation on Strong AI Performance

Amazon's AI Push Drives Market Capitalization Toward $3 Trillion

Amazon.com Inc.'s stock has been on a tear since its March 27 low, with a 36% gain in that span making it the fourth-largest point contributor to the S&P 500 Index. The cloud-computing and e-commerce giant has a market value of $2.9 trillion after adding $432 billion this year, putting it on track to join the exclusive group of companies worth more than $3 trillion.

The stock's resurgence comes after an extended period of underperformance, with Amazon up 65% over the past five years, well below the 121% jump by the tech-heavy Nasdaq 100 Index in that time and even falling short of the S&P 500's 79% gain. However, investor confidence in Amazon's AI strategy is growing, with the company's latest results showing the fastest quarterly sales growth for its Amazon Web Services cloud-computing business in more than three years.

Amazon has multiple paths to succeed with AI, including its latest results showing the fastest quarterly sales growth for its Amazon Web Services cloud-computing business in more than three years. The company has "over $225 billion in revenue commitments" for its Trainium custom AI chips, which are showing robust demand. This development is helping to justify the heavy spending Amazon is continuing to make in developing AI, which is important as investors sell shares of big AI spenders with more questionable outcomes.

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Amazon's AI investments are working out, with its biggest position in Anthropic PBC reportedly in talks to raise new capital at a valuation of more than $900 billion. The company has also agreed to invest $50 billion in OpenAI alongside a commitment for the ChatGPT maker to spend $100 billion on AWS over the next eight years.

As a result of all this, Wall Street is growing more confident about Amazon. Of the 83 analysts tracked by Bloomberg who follow the company, 79 have buy ratings and none have sells. The average price target of $313 anticipates a 16% gain over the next 12 months.

The consensus estimate for Amazon's 2026 earnings per share has risen by 14% over the past month, according to data compiled by Bloomberg, and its revenue projection has also moved higher. The increases are making the shares look relatively cheap at less than 25 times estimated earnings, a significant discount to their 10-year average of 46.

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However, not everyone is sold on the stock's prospects from here, especially as long as Amazon continues to spend aggressively on AI. The company has the highest 2026 capex projection in the S&P 500, nearing $200 billion, and that figure is expected to balloon to $226 billion in 2027.