The US is home to eight tech companies with market capitalizations of over $1 trillion, but only three have graduated from the ultra-exclusive $3 trillion club.
Apple: $3.6 trillion Nvidia: $3.4 trillion Microsoft: $3 trillion
Predict Amazon (amzn -2.83%)) I will be participating in the next two years. At the time of writing, the market capitalization is $2.4 trillion, but that figure could be poised for substantial profitability thanks to the company’s explosive revenue growth and leadership in artificial intelligence (AI). There is.
Here’s how Amazon can chart its path to a $3 trillion club by the end of 2026:
Amazon Web Services is a profit-generating powerhouse
Amazon is generally known as the world’s largest e-commerce company, but also leads the cloud computing industry through its Amazon Web Services (AWS) platform. While AWS offers hundreds of services to help businesses move into the digital age, it has also become the center of AIA’s growth portfolio of AI projects.
Management believes that AI will ultimately be injected into every digital application we use in our daily lives. AWS wants to be the go-to provider that businesses use to provide these services. This involves dominating the three core layers of AI.
The hardware is at the bottom. AWS operates an AI data center infrastructure powered by Nvidia’s industry-leading graphics processing unit (GPU), but also designs its own chips. This includes a new variant called Trainium2, which allows developers to save up to 40% on training costs compared to GPUs from suppliers such as Nvidia.
Large-scale language models (LLMs) form the middle layer. AWS Bedrock Platform helps developers accelerate AI projects by providing access to over 100 off-the-shelf LLMs from third parties such as humanity and Deepseek. AWS has also built a family of internal models called NOVA. This can reduce development costs by up to 75% compared to other LLMs at Bedrock, and is already used by major customers like Palantir Technologies.
The software is the third final layer. Amazon has built an AI-powered virtual assistant into AWS called Q. This helps businesses identify trends in their data, write computer code for software projects, and perform other tasks. Amazon used QQ on a project that saved an estimated 4,500 developer years later last year, according to CEO Andy Jassy in its fourth quarter revenue call. Q’s functionality expands over time and creates new revenue streams for AWS.
AWS generated $107.5 billion in revenue in 2024. It accounted for just 16.8% of Amazon’s total revenues, but 58% of 58% of the company’s total operating profit. In other words, the cloud platform is the profitability engine behind Amazon’s empire.
Image source: Amazon.
AI is also driving the efficiency of e-commerce businesses
While AWS is the central focus of Wall Street analysts and investors, e-commerce continues to be the largest by revenue in Amazon’s largest business unit. The company aims to offer consumers ultra-low prices, so it usually works with razor profit margins, but it is finding new ways to unlock efficiency, including using AI.
The company transformed its logistics network in 2023 by dividing the US market into eight different regions. Companies will be able to store different products in different fulfillment centers depending on their popularity in a particular region, allowing them to travel shorter distances to reach consumers and reduce costs. AI has played a key role in this transition by improving forecasts by 10% and increasing the accuracy of regional forecasts by 20%.
Overall, the company said it would cut costs worldwide for its second year of running in 2024 and would improve further in the future.
Using AI in e-commerce also extends to shopping experiences. The company has developed an AI assistant called Rufus. This helps customers compare products and make the most informed decisions. Next is Amazon Lens, a tool that uses AI and computer vision to find products based on photos taken in the real world by shoppers.
Management also said they have built a generative AI application for third-party sellers that can fill in important details when creating new product pages. This not only speeds up the process, but also ensures that you include important details that will help your product rank highly in the website search results.
The road to a 3 trillion dollar club
Amazon’s improved efficiency in e-commerce segment, combined with AWS’ strong years, generated a record $5.53 in earnings per share (EPS) in 2024, up 90% from the previous year.
This will result in Amazon’s inventory of 40.9 price-to-earning ratio (P/E). This is still a premium on the NASDAQ-100 index, representing all of Amazon’s Big Technology peers, trading at a P/E of 33.8. However, considering the company’s possibilities, the photos look a little different.
Wall Street’s consensus forecast (provided by Yahoo!) suggests that Amazon could generate $7.60 on EPS in 2026.
AMZN PE ratio data by YCHARTS
In other words, Amazon’s stock needs to rise 36.7% over the next two years to maintain its current P/E of 41.3. Of course, this scenario depends on Amazon, which meets Wall Street expectations.
I think that’s very likely given that Amazon actually beat its EPS estimates on the streets by an average of 22.6% over the last four quarters. And Jassy believes that the AI business within AWS could have grown even faster in 2024 without capacity constraints. This means that there were simply not enough data centers to meet the demand from developers.
He believes these restrictions will be eased in the second half of 2025, which could lead to accelerated revenue growth for AWS. It’s the profit engine behind Amazon, so it should lead to much better revenue. If the company continues to exceed EPS expectations in 2025 and 2026, it could reach a $3 trillion club with an even lower P/E.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of Motley Fool’s board of directors. Anthony di Pizio does not occupy any of the stocks mentioned. Motley Fools is located and recommends Amazon, Apple, Microsoft, Nvidia, and Palantir Technologies. Motley Fool recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. Motley Fools have a disclosure policy.
