Amazon: The Next $3 Trillion Stock in 2026

Amazon (AMZN) has been a dominant force in the e-commerce and cloud computing industries for years, and its leadership in artificial intelligence (AI) is positioning it to join the exclusive club of $3 trillion stocks alongside Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT). With a market capitalization of $2.4 trillion as of this writing, Amazon is well on its way to reaching the $3 trillion mark within the next two years. Here's how Amazon can chart a path to the $3 trillion club by the end of 2026.

Amazon Web Services (AWS) is a profit-generating powerhouse
AWS is Amazon's cloud computing platform, which provides hundreds of services to help businesses transition into the digital age. It has become the center of Amazon's growing portfolio of AI projects and is the core focus for Wall Street analysts and investors. In 2024, AWS generated $107.5 billion in revenue, representing just 16.8% of Amazon's total revenue of $637.9 billion but accounting for 58% of the company's total $68.6 billion in operating income. In other words, the cloud platform is the profitability engine behind Amazon's empire.



AI is also driving efficiency in Amazon's e-commerce business
While AWS is the core focus for Wall Street analysts and investors, e-commerce remains Amazon's largest business unit by revenue. Typically operating on razor-thin profit margins, Amazon aims to provide consumers with ultra-low prices. However, it is finding new ways to unlock efficiency, including through the use of AI. The company transformed its logistics network in 2023 by breaking the U.S. market into eight distinct regions, allowing it to store different products in different fulfillment centers depending on their popularity in a given region. This reduces costs and improves efficiency, with AI playing a key role in this transition by improving forecasting by 10% and increasing the accuracy of regional predictions by 20%. Overall, the company said it reduced its cost-to-serve globally during 2024 for the second year running, with further improvements expected in the future.



Amazon's strategy to dominate the three core layers of AI
Amazon's strategy to dominate the three core layers of AI positions it to compete with other tech giants in the AI space. By providing a comprehensive ecosystem for businesses to build and deploy AI solutions, Amazon can attract more customers and generate more revenue. Here's how Amazon's approach in each layer contributes to its competitive advantage:

1. Hardware: Amazon operates AI data center infrastructure powered by Nvidia's industry-leading GPUs, but it also designs its own chips. The new variant called Trainium2 can save developers up to 40% on training costs compared to GPUs from suppliers like Nvidia. This allows Amazon to offer cost-effective hardware solutions for AI development, making it an attractive option for businesses looking to build AI applications.
2. Large Language Models (LLMs): The AWS Bedrock platform offers developers access to over 100 ready-made LLMs from third parties like Anthropic and even DeepSeek, helping them accelerate their AI projects. Additionally, AWS has built a family of models in-house called Nova, which can reduce development costs by up to 75% compared to other LLMs on Bedrock. Major customers like Palantir Technologies are already using these models, demonstrating their value in the market.
3. Software: Amazon embedded an AI-powered virtual assistant into AWS called Q, which can help businesses identify trends in their data, write computer code for software projects, and perform other tasks. Amazon used Q internally late last year for a project that saved the company $260 million and an estimated 4,500 developer years. As Q's capabilities expand over time, it will create new revenue streams for AWS.



Conclusion
Amazon's diverse business portfolio, combined with its leadership in AI and cloud computing, positions it to join the exclusive club of $3 trillion stocks in the near future. With a strong focus on AWS and the use of AI to enhance the efficiency and competitiveness of its e-commerce operations, Amazon is well on its way to reaching the $3 trillion mark by the end of 2026. As the AI revolution continues to unfold, Amazon's unique combination of cloud computing, AI, and e-commerce makes it a strong contender to remain a leader among $3 trillion companies permanently.