Amazon shares hit an all-time high on Monday, August 3, pushing the company's market capitalization above $3 trillion for the first time. The stock closed up 4% in its best session since May 5, CNBC reported. Intraday it reached a record $287.20 and traded around $285.79, up 5.2%, extending a 15.3% jump on Friday and putting the stock up 23% for the year, according to Schaeffer's Investment Research.
Amazon becomes the fifth company to reach $3 trillion, joining Nvidia, Alphabet, Microsoft and Apple. Apple briefly touched $5 trillion on July 28.
The quarter behind the move
The run followed second-quarter results released July 30. Net sales rose 20% year over year to $200.6 billion, from $167.7 billion, and operating income increased to $27.5 billion from $19.2 billion, Amazon reported. Adjusted earnings of $1.97 per share beat the $1.82 analysts expected, and AWS revenue cleared StreetAccount's $40.54 billion estimate, per CNBC.
Amazon Web Services was the segment that moved. AWS net sales rose 37% to $42.2 billion, the segment's fastest growth in 18 quarters, and segment operating income climbed to $16.6 billion from $10.2 billion a year earlier. The business is now at a $169 billion annualized revenue run rate. "AWS is booming, growing 36.7% year-over-year in Q2 — our fastest growth in 18 quarters — and our AI and Chips businesses each eclipsed run rates of more than $25 billion," president and CEO Andy Jassy said.
A $53.4 billion Anthropic gain sat inside net income
Amazon's reported net income of $62.6 billion, or $5.75 per diluted share, is up from $18.2 billion and $1.68 a year earlier. The company disclosed that the figure includes $53.4 billion of non-operating pre-tax other income, primarily from its investments in Anthropic. That gain sits outside operating income, which was $27.5 billion for the quarter. Anthropic's valuation has climbed sharply through 2026, including a $30 billion round at a $900 billion pre-money valuation agreed in May.
Amazon's trailing-twelve-month free cash flow swung to an outflow of $7.6 billion, driven by a $66.1 billion year-over-year increase in purchases of property and equipment, which the company attributed primarily to artificial intelligence investments. For the third quarter, Amazon guided to net sales of $197.0 billion to $202.0 billion and operating income of $22.5 billion to $26.5 billion.
The OpenAI position closed the same week
Amazon finalized its $50 billion investment in OpenAI on July 31 after OpenAI hit undisclosed performance milestones that released the remaining $35 billion tranche, MediaPost reported. The commitment dates to February, when OpenAI raised $110 billion at a $730 billion pre-money valuation with $50 billion from Amazon and $30 billion each from Nvidia and SoftBank. Under that deal AWS became the exclusive third-party cloud provider for OpenAI's Frontier enterprise platform, and OpenAI committed to spending roughly $100 billion on AWS over the next eight years. Citybiz reported Amazon holds roughly a 5% stake.
Roth Capital raised its price target on Amazon to $325 from $300, per Schaeffer's.
Source: CNBC, Amazon, and Schaeffer's Investment Research.
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