Amazon’s market capitalization surpassed $3 trillion for the first time on Monday, driven by a 5.3% surge in its stock price to $285.73. The e-commerce and cloud giant became the fifth U.S. company to reach this milestone, joining Apple, Microsoft, Nvidia, and Alphabet. The rally was fueled by an impressive second-quarter earnings report, particularly the performance of Amazon Web Services.
AWS Revenue Growth Accelerates
AWS revenue jumped 37% year-over-year to $42.2 billion, its fastest growth rate in 18 quarters and well above analyst expectations of around 31%. Operating income for the cloud division rose to $16.6 billion from $10.2 billion a year earlier. Morningstar analyst Dan Romanoff noted that demand spanned both traditional and AI workloads, reinforcing management’s aggressive capital spending plans. Amazon raised its full-year 2026 capex guidance to $220 billion from $200 billion, reflecting heavy investment in data centers and AI infrastructure.
Wall Street Maintains Strong Buy Consensus
Analyst sentiment remained overwhelmingly positive, with 39 Buy ratings and one Hold rating, according to TipRanks. The average 12-month price target stands at $333.03, implying nearly 17% upside from current levels. Citi raised its target to $350, Roth MKM to $325, and Benchmark set a Street-high $400. The upgrades followed AWS’s growth inflection, which Bernstein’s Mark Shmulik called “finally” arriving. UBS projected AWS growth could reach 48% in 2027 as OpenAI begins using Amazon’s Trainium chips, while Amazon’s total revenue might more than double to $1.7 trillion by 2030.
Bezos Share Sale Plan Draws Attention
Just as Amazon hit the historic valuation, a regulatory filing revealed that founder Jeff Bezos can sell up to 15 million shares under a pre-arranged Rule 10b5-1 plan adopted in November 2025. At Monday’s closing price, that stake would be worth approximately $4.3 billion. While the transaction represents only 0.14% of the company’s market value, the timing—with the stock at an all-time high—has attracted scrutiny. Analysts emphasized that the plan predates the rally and reflects disciplined diversification rather than a bearish signal.
Cash Flow and Valuation Concerns
Despite the bullish cloud narrative, Amazon’s trailing 12-month free cash flow turned negative by $7.6 billion as capital expenditures surged. Additionally, the reported $62.6 billion quarterly net income included $53.4 billion in non-operating income from the rising value of its Anthropic investment, meaning core operating cash generation remains a key metric to monitor. Strategists cautioned that sustaining the $3 trillion valuation hinges on AWS maintaining rapid growth and eventually converting infrastructure spending into strong free cash flow.
