Amazon's $3 Trillion Valuation Surges as Cloud Demand Outpaces Supply

Amazon's market value crossed $3 trillion for the first time in its history on Monday, making it only the fifth company to reach this milestone. This achievement is a testament to the growing demand for Amazon Web Services (AWS), which has already sold more cloud capacity than it can physically build through 2027.

AWS posted $42.2 billion in second-quarter revenue, a 37% year-over-year increase and the division's fastest growth rate in 18 quarters. CEO Andy Jassy disclosed that contracted cloud commitments reached $496 billion at the end of the second quarter, a $132 billion increase in a single quarter.

The supply shortage has been priced into Amazon's stock price, contributing to its post-earnings surge and helping push the Dow Jones Industrial Average to a record close. The S&P 500 also gained, within striking distance of its own all-time peak.