Amazon.com Inc. has reached a $2 trillion market valuation for the first time ever, propelled by an artificial intelligence-fueled rally that has pushed the tech giant into record territory. Shares rose 3.9% on Wednesday to close at $193.61, elevating the market value to over $2 trillion. Amazon now joins an elite club of peers that have surpassed this key market capitalization threshold. Alphabet Inc. crossed the $2 trillion mark in late April, while rallies have driven the market values of Nvidia Corp., Microsoft Corp., and Apple Inc. to more than $3 trillion.

Amazon shares have fluctuated since the company’s first-quarter earnings, during which its cloud unit posted the strongest sales growth in a year, helping to propel the stock above the all-time high set in April. The stock rallied in June, recovering losses from the end of May, and has gained 27% so far this year.

Shares of the megacap technology company have been buoyed over the past year as the company cut costs and restructured its business to capitalize on the AI frenzy. In addition, its key Amazon Web Services (AWS) business has shown signs of re-accelerating growth, which has been a significant point of optimism for investors.

“Part of the good stock performance over the last six to nine months for Amazon has been related to the fact that it was oversold” at the end of 2022, said Dan Romanoff, an analyst at Morningstar Investment Service.

The company’s cloud unit, AWS, has been a cornerstone of this growth, posting the largest sales increase in a year and demonstrating resilience amid the broader tech sector’s volatility. AWS’s robust performance is seen as a bellwether for Amazon’s sustained growth and its ability to leverage AI technologies to drive further innovation and efficiency.

Amazon’s rise to the $2 trillion valuation is emblematic of the broader market trends, where tech giants are increasingly harnessing the power of AI to enhance their service offerings and operational efficiencies. This milestone underscores the significant market confidence in Amazon’s strategic direction and growth potential amid the AI boom.

The rally is also reflective of a broader market trend where major tech firms are seeing unprecedented growth due to their investments in artificial intelligence. The AI sector has been a major driver of value, with companies like Nvidia, Microsoft, and Alphabet reaping substantial benefits from their AI initiatives.

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