Amazon enters $2 trillion market cap club

Amazon surpassed $2 trillion in market capitalisation for the first time on Nasdaq in overnight trading on Wednesday. The stock surged 3.9% to finally close at $193.61 yesterday night. With this, Amazon became the fifth U.S. company after Microsoft, Apple, Nvidia, and Alphabet to touch this milestone.

Optimism around advancements in artificial intelligence and generative AI with a speculated easing of interest rates by the federal reserve and a strengthened U.S. economy have powered the overwhelming performance of tech stocks in recent days.

A possible rate cut announcement by the US Federal Reserve is expected to benefit the future cash flows of these companies. Additionally, Amazon has made strategic investments in artificial intelligence on which are helmed the company's future growth plans.

Amazon plans to heavily capitalise on the AI boom as the firm has invested $4 billion in San Francisco-based startup Anthropic and robotics firm Figure. Anthropic recently unveiled its newest-ever AI model of Claude 3.5 Sonnet. Amazon has focussed on building products useful for businesses which includes a chatbot called Q, available to those enterprises that use its cloud computing unit AWS. Amazon Web Services, the cloud computing subsidiary of Amazon announced earlier in June that the company will commit $230 million for startups around the world to foster the creation of generative AI applications. Amazon even announced a generative AI-based digital assistant for businesses to establish a presence on its Indian eCommerce website.

Amazon replaced Walgreens Boots Alliance in the Dow Jones Industrial Average earlier in February this year.

The company has deployed advanced technologies to solidify its status as a market leader. Amazon’s feat corroborates the tech sector's dominance in the current global market environment.

Amazon's $2 trillion market valuation comes just a little over a week after Nvidia touched the $3 trillion mark and became the most valuable company on Wall Street for a brief period.

This announcement is going to help Indian tech stocks solidify their positions in the Indian stock markets just like they did post the Nvidia rally. Amazon has expanded its Indian arm considerably with investment announcements being made regularly. The company last year completed ten years in India. Amazon has helped over 70 Indian startups raise funds with its Global Selling’s Propel Startup Accelerator program.