Amazon reaches $2 trillion valuation for the first time

Amazon.com, the US-based tech and e-commerce company, has reached a valuation of $2 trillion for the first time. This makes it the fifth US company to reach this market value, a rise that is being attributed to the recent AI boom. 

As per Reuters, among the increasing demand for AI, there are potential interest rate cuts this year that drove demand for technology-related stocks. Amazon's stock rose 3.4% to $192.70, giving the e-commerce giant a market value of over $2 trillion and putting it in the same club as technology heavyweights Microsoft Corp, Apple Inc, Nvidia Corp, and Alphabet.

US stock indexes have recorded robust gains this year on relentless enthusiasm around AI, optimism around resilience in the US economy and potential easing of interest rates from the Federal Reserve.

Wall Street was trading near record levels, largely powered by megacap stocks such as Nvidia and Amazon, whose future cash flows stand to benefit from lower interest rates.

Shares of Amazon, which were added to the blue-chip Dow Jones Industrial Average index in February, have climbed over 26% this year. The company became the fifth biggest US company by market value in February after Nvidia went up a spot.

Amazon Web Services is the largest cloud services provider in the world, and growth at the Amazon unit has returned after a dip in the past year, thanks to surging adoption of AI technologies.

The company has also invested in AI startup Anthropic and robotics firm Figure as it looks to capitalise on the AI boom. Late last year, Amazon unveiled a new generation of custom-designed chips used in data centres, targeting applications for machine-learning training and generative artificial intelligence.