Amazon crossed the $3 trillion mark today for the first time in its history.
And the crossing held at the close: Amazon finished at $284.02, up 4.58% - a market capitalisation of roughly $3.06 trillion. During the session it also touched $285.64.
What actually got it here
Today was green across large-cap technology - though the indices themselves rose only 1.42% and 1.76%. And in any case, today did not do the work.
The report did. On 31 July, the day after publication, Amazon jumped 15.35% in a single trading session - the strongest reaction among the large reports of that evening, in which Apple fell 8.07% and Reddit collapsed 20.70%. The distance to $3 trillion was closed there, not today.
One figure drove that jump: AWS grew 37% to $42.2 billion in the quarter, and its operating income jumped 63% to $16.6 billion. In the cloud, which is Amazon's real profit engine, that is acceleration rather than deceleration.
The $3 trillion club, as of today
| Company | Market cap | P/E |
|---|---|---|
| Nvidia | $4.85 trillion | 30.7 |
| Alphabet | $4.57 trillion | 18.8 |
| Apple | $4.52 trillion | 35.2 |
| Microsoft | $3.64 trillion | 27.3 |
| Amazon | $3.07 trillion | 23.0 |
A point worth noticing: Amazon is the second cheapest in the club. At a P/E of 23 it trades below Microsoft, Nvidia and Apple, and only Alphabet is cheaper. The company that just joined the club is not the one carrying the highest multiple in it.
Where it is expanding
Amazon's path has never been a straight line, and the fronts it is opening today are a long way from the bookstore it came out of.
The cloud, and AI within it. AWS is the core - $42.2 billion in the quarter and 37% growth. But beyond the infrastructure itself, Amazon is the largest investor in Anthropic, and the financial significance of that stake showed up in the last report in extreme form.
Advertising. The revenue line growing fast at high margin, resting on an asset Amazon holds and nobody else does: purchase-intent data from actual buyers.
And satellites. On 27 July Amazon filed with the FCC for approval of a network of 5,105 direct-to-device satellites - messaging, data and emergency services straight to a phone, with no special equipment. The move rests on the $11.6 billion acquisition of Globalstar, which brings S-band spectrum licences with global authorisations. This is a direct front against SpaceX's Starlink, and the deal is expected to close in 2027.
And the figure that demands caution
This is the part that did not make the headlines of the report, and it should not be skipped.
Reported EPS of $5.75, against expectations of $1.82, is misleading. It includes $53.4 billion of non-operating income - mainly the revaluation of the Anthropic investment. That amount is 1.95 times all of the company's operating profit in the same quarter.
Excluding that item, EPS is $1.95. And at the same time, free cash flow turned negative - a result of the pace of capital expenditure on cloud infrastructure.
What this means in practice
A revaluation of a holding is not cash coming in. It can rise in one quarter and fall in the next, without anything in the business changing. Anyone reading the $5.75 headline and inferring Amazon's earning power from it is reading a number that does not describe the business. The number that describes the business is AWS growing 37% at a rising operating margin - and that is a good number on its own, with no revaluation required.
My Angle
A personal opinion of Ilan Abramov - not advice, not a recommendation
Three trillion dollars is a nice number for a headline, but on its own it says almost nothing. What does say something is how they got there.
Amazon did not arrive here on a story. It arrived on a quarter in which its cloud grew 37% and its operating income jumped 63% - a business growing and earning more at the same time. That is the rare thing.
And still I am cautious on two points. The first is that reported earnings were inflated by a non-cash revaluation, which is exactly the pattern I have written about throughout this earnings season: the bottom line stopped describing the business. The second is that free cash flow is negative, because Amazon is investing at an enormous pace in infrastructure.
That investment may turn out to be the right move of the decade, or an expense that weighs on the coming years. At this stage it is still an open question, and anyone closing it in either direction is getting ahead of the data.
Want the full breakdown of the report, including the $53.4 billion that changed the picture? Amazon: AWS Jumped 37% and the Test We Set Was Passed - But $3.80 of the $5.75 Is a Revaluation
And on the satellite front: Amazon Files for 5,105 Satellites That Talk Directly to Phones
