While the Artificial Intelligence (AI) is not an official onset date to mark the revolution, I personally prefer to use November 30, 2022 as my timestamp. This is the day when Openai released a chatgpt to the public, actually changing how businesses and consumers get information on a switch flip.

back then, Heroic ,AMZN 1.81%, Capitalized a market of $ 835 billion. Today, the company’s value is almost triple – approximately $ 2.3 trillion is hovering.

While Amazon cannot pay much attention to his “brilliant seven” colleagues Nvidia Or TeslaThe company is quietly creating a rich AI ecosystem – and Wall Street is finally starting to take notice. Last month, investors came to know that billionaire Hedge Fund Manager Bill Ekman started his stake in Amazon through his investment firm, Persing Square Capital Management.

Let’s see how Amazon is integrating AI in its various businesses. Even more importantly, I will analyze the recent price action in the stock so that I think Amazon Wall Street’s first $ 5 trillion is posted to become stock.

How Amazon is building an AI ecosystem

The most obvious region of Amazon’s ecosystem which has so far benefited from AI Boom is the company’s cloud computing segment, Amazon Web Services (AWS). Over the years, AWS has invested billions in a start-up called anthropic, which competes with Openai. During this partnership, AWS has seen notable revenue acceleration combined with significant detail in the operating margin.

This is an important perception to understand, as AWS is responsible for the majority of operating benefits throughout the Amazon ecosystem. Thanks to a successful partnership with anthropic so far, Amazon now has even more financial flexibility, which he can cross into other AI-operated services.

For example, Amazon is also testing various forms of AI robotics in its fulfillment centers, which can theoretically bring new levels of efficiency and automation for procedures managed by human labor.

Finally, Amazon is also developing its own custom chipset – dubbed Tipatia grass And AccidentIn the long run, these may have more opportunities for Amazon to complement your existing hardware business when entering new markets to compete more directly with existing semiconductor designers.

Image Source: Getty Image.

Ekman bought a dip

As this writing (June 11), Amazon’s stock has declined by about 1% on the year. However, it can initially be revealed as a reluctant, consider how shares have rebounds since below $ 167 in April.

AMZN Data by Ycharts,

It is my suspicion that Ekman took advantage of selling last month and Dip purchaseI bring it, because, the interesting thing is that the position of Amazon of Persia was not included in the fund. 13f filing For the first quarter. Instead, Amazon’s status of Amazon was publicly reported after the news of a call held with his investors.

How can Amazon get a $ 5 trillion valuation?

The chart under the benchmark has Amazon’s market cap growth since the release of the chat relative to many of its brilliant seven colleagues. I intentionally kept out Apple And Tesla From this analysis, as I do not see much in the way of direct competition for Amazon.

Amzan Market Cap Data by Ycharts,

There are some notable takeaets from the above trends.

First, the evaluation of Amazon has increased significantly compared to both Microsoft And Alphabet Over the years. This is important because both companies compete fiercely with Amazon in the cloud computing market, especially. I see it as a possible sign that investors may be more rapid on Amazon’s ability to maintain an edge in cloud landscape, despite the intensity Investment in AI Infrastructure From competition.

In addition, it is clear that NVidia has been the best spectacular investment in the AI ​​revolution so far. But as I mentioned above, Amazon actually has a unique opportunity to start competition with Nvidia through the introduction of its new chipset.

In my view, Amazon has a strong foundation to continue Quick Revenue and profit increase for long time. Despite already receiving a demon in the last few years, I think the investors will continue to keep a premium on the Amazon stock relative to their peers, which will have to move forward Evaluation expansion In the coming years.

For these reasons, I believe that the current trajectory of Amazon supports the idea that the company can see more than twice the increase in the market cap and reach the $ 5 trillion valuation before its peers.