Amazon is valued at $2 trillion thanks to AI enthusiasm and interest rate cut bets

(Reuters) – Amazon.com’s market value topped $2 trillion for the first time on Wednesday, becoming the fifth U.S. company to surpass that level, as optimism about artificial intelligence and potential interest rate cuts this year fueled demand for technology-related stocks.

The stock rose 3.4% to $192.70, giving the e-commerce giant a market value of more than $2 trillion and putting it in the same club as technology heavyweights such as Microsoft Corp, Apple Inc, Nvidia Corp and Alphabet.

US stock indexes posted strong gains this year thanks to continued enthusiasm around artificial intelligence, optimism about the resilience of the US economy and potential interest rate easing from the Federal Reserve.

Wall Street was trading near record highs, largely supported by mega-cap stocks like Nvidia and Amazon, whose future cash flows are expected to benefit from lower interest rates.

Amazon shares, which were added to the blue-chip Dow Jones Industrial Average in February, have risen more than 26% this year. The company became the fifth-largest U.S. company by market value in February after Nvidia moved up a position.

Amazon Web Services is the world’s largest cloud services provider, and growth at Amazon’s unit has returned after a decline last year, thanks to the growing adoption of artificial intelligence technologies.

The company has also invested in AI and robotics startup Veger, as it looks to capitalize on the AI ​​boom.

Late last year, Amazon unveiled a new generation of custom-designed chips used in data centers, targeting machine learning and generative AI training applications.

(Reporting by Shristi Ashar A in Bengaluru; Additional reporting by Akash Sriram; Editing by Shinjini Ganguly)