On July 3, Amazon created a history, as its market value, for the first time, topped USD 3 trillion, helped by a sharp rally following strong earnings and signs that the AI boom is driving fresh demand for its cloud-computing services, the company’s main profit engine.
Amazon, whose stocks have gained over 23% so far in 2026, saw its biggest one-day market jump since April 2012, after the Seattle-based e-commerce and cloud computing giant delivered its strongest cloud growth in more than four years and raised its annual capital spending forecast.
Apple, Microsoft, Alphabet, and Nvidia are the other companies that have recorded a market value of USD 3 trillion in the past. Nvidia is currently the world’s biggest venture, with a market capitalization close to USD 5 trillion.
After hitting a USD 2 trillion valuation for the first time in June 2024, it took Amazon, founded by Jeff Bezos back in 1994, just over two years to add another trillion dollars to its market value.
Analysts welcomed Amazon’s latest feat, stating that it helped answer a key question surrounding the Big Tech: whether hundreds of billions of dollars being poured into AI data centers and chips are producing adequate returns.
Hailing the results, Amazon CEO Andy Jassy said demand remained so strong that the company still lacked enough computing capacity to serve customers despite raising its capital spending forecast by 10% to USD 220 billion.
Revenue at Amazon Web Services jumped 37% to $USD 2.2 billion in the second quarter ended June 30, handsomely beating analysts’ consensus estimate of a 31.21% increase.
“AWS is booming. Our AI and chips businesses each eclipsed run rates of more than USD 25 billion,” Jassy said, while noting the latest growth figure as the unit’s fastest in 18 quarters.
As Jassy raised Amazon’s capital spending forecast on the higher territory, he blamed the increasing cost of memory chips behind the move.
“Even at that amount, we will still not have enough capacity to meet all of the demand we have in 2026. I believe this dynamic will also be true in 2027 too,” he told the analysts and investors.
AWS contract backlogs at the end of the Q2 2026 stood at USD 496 billion, up from USD 364 billion in the prior three-month period.
Amazon’s free cash flow turned sharply negative. The company burned USD 7.6 billion of cash on a trailing 12-month basis in the second quarter, compared to USD 18.2 billion in 2025.
However, Amazon is not alone, as its “Big Tech” competitors Microsoft, Alphabet, and Meta have all reported big drops in free cash flow while ramping up spending.
“There were concerns about market share losses on AWS, but that’s been put to bed now. It just gives more evidence that AWS’s lead is still intact. The AI tide is rising all boats here,” said Dan Morgan, portfolio manager at Synovus Trust, while interacting with Reuters.
The solid Q2 numbers from the “Big Tech” in general will pacify concerns over Big Tech’s relentless AI investments, which are set to exceed USD 700 billion in 2026. The phenomenon has strained cash flows at the traditionally cash-rich companies, apart from sparking worries about the capacity overbuilding.
However, “Big Tech” stakeholders, including Amazon, have justified the spending as “crucial.” The outlays, as per them, will help ease capacity constraints that have prevented the companies from fully meeting AI-driven demand amid ballooning contract backlogs.
“Amazon starts spending on data centers roughly two years before they open, which creates a period where cash is flowing out but revenue has not yet arrived. Once operational, however, those facilities can generate revenue for 30 years while AI servers typically recoup their cost in less than three years and then continue generating profits for another two to three years,” Jassy said.
Jassy also said, “The lion’s share of AWS compute capacity for 2027 had already been reserved by its customers. The company has ‘quite a bit of capacity’ reserved for 2028 as well.”
AWS has also stitched up strategic partnerships, including massive cloud infrastructure and chip supply deals with OpenAI, Anthropic, Meta, Pinterest, and Snowflake.
On the e-commerce domain, Amazon has been rolling out faster delivery services globally and expanding to more rural areas of the United States. In its annual “Prime Day” event, held in Q2, customers snapped up discounted electronics, appliances, and everyday essentials. Estimates from Adobe Analytics pegged total spending at over USD 26.4 billion.
Advertising, another closely watched metric, showed continued strength. Amazon has already populated “Prime Video” and its shopping website with marketing messages. That has resulted in the ad sales rising 26% from a year earlier to USD 19.8 billion.