In a striking reversal of the AI‑spending scepticism that haunted markets earlier this year, both Amazon and Microsoft have seen their market capitalisations climb to new heights, with Amazon briefly crossing the $3 trillion threshold and Microsoft posting a robust rally on the back of strong cloud‑AI revenue. Analysts attribute the surge to a combination of resilient consumer spending, accelerated enterprise migration to AI‑enhanced cloud services, and a renewed confidence that the hype surrounding generative AI is translating into sustainable earnings. Amazon’s growth is driven by its AI‑infused retail recommendation engine and the rapid adoption of its Bedrock service, while Microsoft’s Azure AI suite continues to outpace rivals in enterprise contracts.
The market’s renewed optimism has broader implications for capital allocation across the tech sector. Venture capital flows into AI‑focused startups have steadied, and public‑company AI spend guidance has become a key metric for investors. Yet, the rally is not without cautionary notes; analysts warn that valuation multiples remain elevated and that any slowdown in AI adoption or regulatory headwinds could quickly temper enthusiasm. Nonetheless, the current trajectory suggests that AI is cementing its role as a core growth engine for the world’s largest technology firms, reshaping investor expectations and setting a new benchmark for market performance in the post‑pandemic era.
This story was written by a language model from reporting by GeekWire. Check the original before quoting it.