Amazon’s Ascent: Could the E-Commerce Giant Be the Next $3 Trillion Company?
The exclusive club of companies valued at $3 trillion or more currently has just three members: Nvidia, Alphabet and Apple. Microsoft recently fell from grace after a stock correction. But a compelling case can be made for Amazon (AMZN +0.58%) to be the next to join their ranks, fueled by rapid growth in its cloud computing division and increasing profitability in its core e-commerce business.
The Power of AWS: Artificial Intelligence as a Catalyst
Amazon Web Services (AWS) is the world’s largest cloud platform, and it’s rapidly evolving beyond simple data storage. AWS is now a major player in the artificial intelligence space, offering a growing portfolio of products and services – from computing capacity to foundation models and specialized software. This focus on AI is driving accelerated revenue growth.
Amazon isn’t just a customer of AI chip giant Nvidia; it’s also a competitor, developing its own AI chips like Trainium. The latest Trainium2 chip offers up to 40% better price performance than competing hardware when training AI models, and Trainium3 delivers a further 40% improvement. AWS Bedrock provides businesses with access to ready-made foundation models, including Amazon’s own Nova family, allowing for highly customized AI applications.
AWS generated $128.7 billion in revenue during 2025, with year-over-year growth accelerating from 17% in the first quarter to 24% in the fourth, largely due to demand for AI services. A staggering $244 billion order backlog at the end of 2025, up 40% year-over-year, signals continued strong demand. Amazon plans to invest $200 billion in 2026 to expand its infrastructure and meet this demand.
E-Commerce Efficiency: A Boost to the Bottom Line
Even as AWS is a significant growth driver, Amazon’s e-commerce business remains its largest revenue source. Historically, this segment operated on thin profit margins, prioritizing low prices for customers. Yet, a major overhaul of its U.S. Logistics network is changing that.
By shortening the distance each order travels, Amazon has significantly improved delivery times and reduced fulfillment costs. In 2025, the company delivered a record 8 billion packages to Prime members in the U.S. On the same day or the next day – a 30% year-over-year increase. These efficiency gains, combined with AWS’s growth, are driving substantial improvements in Amazon’s overall profitability.
Amazon reported $77.6 billion in GAAP net income in 2025, a 31% increase from the previous year, translating to earnings of $7.17 per share.
The Path to $3 Trillion: A Mathematical Perspective
Despite recent market volatility, Amazon’s stock currently trades at a price-to-earnings (P/E) ratio of 28.6, a discount compared to the Nasdaq-100’s P/E ratio of 31.6. Wall Street analysts predict Amazon’s earnings will reach $7.75 per share in 2026 and $9.39 per share in 2027.
If these estimates hold true, Amazon’s stock would need to increase by 29.4% by the end of 2027 to maintain its current P/E ratio, pushing its market capitalization to $2.85 trillion. Trading in line with the Nasdaq-100’s P/E ratio would require a 42.9% jump, resulting in a $3.14 trillion valuation.
Given Amazon’s P/E ratio exceeded 35 just six months prior, reaching the $3 trillion mark in under two years appears increasingly realistic.
Frequently Asked Questions
Q: What is Amazon’s current market capitalization?
A: As of February 27, 2026, Amazon’s market capitalization is $2.2 trillion.
Q: What is AWS?
A: AWS (Amazon Web Services) is the world’s largest cloud computing platform, offering a wide range of services to businesses.
Q: What role does AI play in Amazon’s growth?
A: AI is fueling accelerated revenue growth for AWS and improving efficiency in Amazon’s e-commerce operations.
Q: What is Amazon doing to improve its e-commerce profitability?
A: Amazon has overhauled its U.S. Logistics network to shorten delivery distances and reduce fulfillment costs.
Did you know? Amazon is both a major customer *and* a competitor to Nvidia in the AI chip market.
Pro Tip: Keep a close eye on AWS’s order backlog – it’s a key indicator of future growth potential.
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