Amazon's market capitalization surpassed $3 trillion for the first time Monday, as shares hit a new all-time high on the back of last week's second-quarter earnings beat. The rally extended across the cloud sector, with Microsoft and Google also climbing after reporting accelerating cloud growth.
Amazon's market capitalization surpassed $3 trillion for the first time Monday, as shares hit a new all-time high and extended a rally that began with last week's earnings report.
Shares climbed as much as 5% to 284.58 in morning trading, putting Amazon more than 20% higher over the past two trading days. CNBC reported the session marked the stock's best day since May 5, with shares up roughly 4%.
AWS revenue beats estimates
The rally builds on a second-quarter report that topped Wall Street's targets. Amazon posted adjusted earnings of $1.97 a share, beating estimates of $1.82. Revenue reached $200.61 billion, ahead of the $196.47 billion analysts had projected.
Amazon Web Services revenue rose to $42.2 billion, past StreetAccount's forecast of $40.54 billion. On the call, CEO Andy Jassy said current capacity plans will fall short of demand this year, a dynamic he expects to persist in 2027. According to CNBC: "the demand we already have for 2028 is striking."
Amazon lifts its AI spending forecast
Amazon also raised its spending outlook. Capital expenditures are now projected to reach $220 billion this year, up from a prior $200 billion estimate, as memory prices tied to the AI buildout keep rising.
Amazon's trailing 12-month free cash flow turned negative $7.6 billion, compared with a positive $18.2 billion a year earlier. Jassy has said the investment will pay off: Amazon breaks even on servers and chips in under three years, while its equipment contracts often run five years or more, and new data centers take at least a year to build but can last for 30 or more years.
AWS is currently on a $169 billion annual revenue run rate. Jassy said AWS could eventually generate $1 trillion in annual revenue with strong free cash flow.
Cloud rivals ride the same wave
Amazon's gains echoed across the sector. Microsoft's Azure cloud revenue rose 43% in its fiscal fourth quarter. Google Cloud grew 82% in its own quarter.
Alphabet shares added 4% to 370.01 Monday. Microsoft rose more than 3% to 481.98.
A Bank of America Securities analyst said Monday that hyperscaler results show computing power remains largely constrained by supply. The bank projects combined hyperscaler capital spending will reach $860 billion this year, up 80% from 2025.
Sources: US Top News and Analysis, Investor's Business Daily
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