Amazon's market capitalization crossed the $3 trillion threshold for the first time on Monday, driven by a robust earnings report that signaled its heavy investments in artificial intelligence are starting to pay off. The stock rose 5% during the session, extending gains from last week's earnings release and reversing a sharp decline that had seen shares fall nearly 18% from their May record high.
The company's cloud computing unit, Amazon Web Services (AWS), reported its fastest growth in over four years, easing concerns that massive AI infrastructure spending across the tech sector might not deliver meaningful returns. Amazon also raised its annual capital expenditure outlook, reinforcing its commitment to AI-driven expansion. This milestone places Amazon alongside Apple, Microsoft, Alphabet, and Nvidia as one of the few publicly traded companies valued above $3 trillion.
Investors have been closely watching Amazon's AI-related spending, and the latest results have bolstered confidence in the sector. The positive sentiment spilled over to other tech names, with Nvidia climbing 2.6% as Amazon's increased AI spending alleviated worries about demand. The broader market also benefited, with the Dow Jones Industrial Average adding 200 points as Amazon's cloud strength fueled an AI rally.
AstraZeneca slides on merger speculation
AstraZeneca's shares dropped more than 6% after reports emerged that the company had held preliminary merger discussions with Bristol Myers Squibb. Reuters, citing a person familiar with the matter, confirmed an earlier Financial Times report that the two pharmaceutical giants had explored a potential combination. Such a merger would create one of the world's largest drugmakers, with a combined market value of nearly $400 billion based on Friday's closing prices.
Investors reacted cautiously, questioning the strategic rationale behind such a large acquisition while AstraZeneca continues to deliver strong organic growth. Jefferies analysts also expressed skepticism, arguing that expanding AstraZeneca's oncology pipeline could be achieved through other means, such as licensing agreements, which the company has increasingly pursued, particularly in China.
AstraZeneca has committed to investing $50 billion in US manufacturing and research by 2030 and recently completed a listing on the New York Stock Exchange. Chief Executive Sir Pascal Soriot said last week that the company does not need mergers and acquisitions to achieve its target of generating $80 billion in annual revenue by 2030. Meanwhile, Bristol Myers Squibb faces pressure from its acquisition of Celgene and the approaching patent expirations of several blockbuster drugs.
Oil prices tumble as Iran tensions ease
Oil prices fell around 5% on Monday after US President Donald Trump said he had called off planned military strikes against Iran and expressed hope that discussions between the two countries could resume. Brent crude declined 4.72% to $83.78 a barrel, while West Texas Intermediate fell 5.24% to $80.24, with Brent heading for its lowest close in about three weeks.
Although Iran denied that any negotiations were scheduled, the possibility of reduced geopolitical tensions weighed on crude prices after months of volatility linked to the conflict. Markets also monitored shipping disruptions across the Middle East, with several Saudi oil tankers altering their routes following threats from Yemen's Houthi movement, and vessel traffic through the Strait of Hormuz slowing after reports of attacks.
Gold steadies ahead of US jobs data
Gold prices edged higher, reversing earlier losses, as investors balanced ongoing geopolitical uncertainty against expectations that inflation could remain elevated, keeping the Federal Reserve cautious on interest rates. Spot gold was up 0.34% to $4,054.68 an ounce, while US gold futures settled 0.05% higher at $4,109.10.
The metal has largely traded within a range between $4,000 and $4,200 for more than a month as higher energy prices continue to fuel inflation concerns. Investors are now focused on a series of US labor market reports due this week, including the ADP employment report and the closely watched nonfarm payrolls release, for further clues on the Federal Reserve's next policy decision.
Elsewhere, South Korea's central bank announced plans to purchase gold from domestic producers as it seeks to diversify its sources of supply and increase its holdings of the precious metal.
This article is for informational purposes only and does not constitute financial advice.
