(NASDAQ:AMZN) Amazon Stock Hits Record High Amid Expansion and AI Investments

Amazon's stock price (NASDAQ: AMZN) has rallied recently, taking out new all-time-highs, with a close of $200. With a 1.42% gain on the day supported by 0.4% in the pre-market session, the 2024 return on the stock now stands at 33.4%.

This milestone came as the online retail giant disclosed plans to bolster its online marketplace while simultaneously pouring investments into artificial intelligence (AI) technologies, positioning Amazon Web Services (AWS) to maintain its competitive edge in cloud computing. The market cap of the company has also pushed above $2trillion.

The expansion of its online business is part of Amazon's strategic shift to contend with fast-growing, low-cost e-commerce players, such as Shein and Temu. By targeting the no label, inexpensive product category, Amazon aims to capture a larger market share and cater to cost-conscious consumers seeking value deals online.

However, Amazon's journey has not been without its setbacks. The giant e-tailer reported a substantial hit of approximately $1 billion in February due to its investment in electric vehicle manufacturer Rivian (NASDAQ: RIVN), illustrating the inherent risks involved in backing startups in new market segments. Rivian share price has also rallied in recent times, after the announcement of a deal with Volkswagen, and improved delivery numbers.

Despite the losses incurred from emerging industry bets, Amazon’s financial backbone remains sturdy. AWS, a leading force in the global cloud market, continued to demonstrate robust performance, contributing a staggering 62% to the company’s overall operating profits in the first quarter of 2024. This figure underscores the vital role AWS plays in Amazon's overarching financial health and growth strategy.

Looking ahead, analysts and investors are keeping a keen eye on Amazon’s second-quarter earnings report for the year 2024. The anticipated release is slated for the window between July 25 and August 1, promising a closer look into the company's operations and strategy moving forward.

While Amazon forges ahead with its expansion plans and notable investments into AI, its mixed financial experiences serve as a reminder of the complexity and volatility inherent in tech and retail investments. With AWS as a consistent driver of profit and a forward-looking approach to e-commerce, Amazon continues to be a major force to watch in the technology and retail sectors.