Amazon shares jumped more than 4% on Monday, pushing the company's market capitalization past $3 trillion after it delivered its strongest cloud growth in over four years and raised its capital expenditure forecast to $220 billion for the year.
The cloud number that mattered
AWS revenue growth accelerated to its fastest pace since 2022, driving total revenue to $201 billion against analyst estimates of $196 billion. The beat was modest but the guidance was not: capital expenditures were increased by $20 billion from the February forecast, with CEO Andy Jassy attributing the rise to memory prices linked to the AI buildout continuing to climb.
The club membership expands
Amazon becomes the fifth U.S. company to cross the $3 trillion threshold, joining Apple, Microsoft, Alphabet and Nvidia. Nvidia currently sits near $5 trillion. Amazon took a little over two years to add its second trillion after first hitting $2 trillion in June 2024.
The hyperscaler chorus
The move lifted peers across the board: Microsoft shares rose 4%, Meta Platforms 6%, Alphabet and Oracle 4-5%. Microsoft separately said it expects to remain cash-generative through fiscal 2027 and forecast capital spending below Wall Street estimates, producing its largest single-day gain since 2008.
The spending logic remains circular
Analysts have questioned whether the collective AI outlay will ever earn a return, a concern that triggered a selloff earlier this year and crashed South Korea's Kospi. The company's stated rationale is a claim, not a fact. Jassy cited rising memory prices driven by AI demand as a reason for higher capex, effectively arguing that the cost of meeting demand is rising because of the demand. The source does not disclose any break fee on the capex commitment or the premium paid for the market cap increase.