Amazon tops $3 trillion as AWS cloud surge fuels record high — SkimNews
SkimNews Take
Amazon's market reward for an aggressive AI-driven capex hike signals that hyperscalers' infrastructure spending is now priced as a moat-building investment rather than a near-term margin drag.
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- Amazon shares surged 4% on Monday to close at a new all-time high, pushing its market capitalization past $3 trillion for the first time following last week's Q2 earnings beat — the stock's best single-day gain since May 5.
- Amazon reported Q2 adjusted EPS of $1.97 against $1.82 estimates and revenue of $200.61 billion versus $196.47 billion expected, driven by surging cloud growth.
- Amazon Web Services posted $42.2 billion in revenue, beating StreetAccount expectations of $40.54 billion as AI demand accelerated the cloud division.
- Amazon raised its 2025 capex projection to $220 billion, up from $200 billion guided in February, as CEO Andy Jassy cited rising memory prices tied to the AI buildout.
- Jassy warned that even at $220 billion the company will still lack enough capacity to meet demand in 2026 and 2027, calling existing 2028 demand "striking."
- Microsoft Azure cloud revenue rose 43% in its fiscal Q4 while Google Cloud posted 82% growth in their own earnings, underscoring an industry-wide cloud surge driven by enterprise AI demand.
Why it matters: Amazon's $3 trillion valuation reflects investor confidence in AWS's AI-fueled cloud dominance, but the raised $220 billion capex guide — with capacity still insufficient through 2027 — shows compute demand is structurally outstripping supply, locking in a multi-year revenue floor even as margins face near-term pressure from the infrastructure buildout.
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