<div id="readability-page-1">The U.S. is home to eight technology companies with a market capitalization of $1 trillion or more, but only three have graduated into the ultra-exclusive $3 trillion club: <ul> <li>Apple: $3.6 trillion</li> <li>Nvidia: $3.4 trillion</li> <li>Microsoft: $3 trillion</li> </ul> I predict Amazon (AMZN -2.83%) will join them within the next two years. It has a market cap of $2.4 trillion as of this writing, but that figure could be poised for significant upside thanks to the company's explosive earnings growth and its leadership in artificial intelligence (AI). Here's how Amazon can chart a path to the $3 trillion club by the end of 2026. <h2>Amazon Web Services is a profit-generating powerhouse</h2> Amazon is typically known as the world's largest e-commerce company, but it also leads the cloud computing industry through its Amazon Web Services (AWS) platform. AWS provides hundreds of services to help businesses transition into the digital age, but it has also become the center of Amazon's growing portfolio of AI projects. Management believes every digital application we use in daily life will eventually be infused with AI. AWS wants to be the go-to provider that businesses use to deliver those services, which will involve dominating the three core layers of AI. Hardware is the bottom layer. AWS operates AI data center infrastructure powered by Nvidia's industry-leading graphics processing units (GPUs), but it also designed its own chips. That includes a new variant called Trainium2, which can save developers up to 40% on training costs compared to GPUs from suppliers like Nvidia. Large language models (LLMs) make up the middle layer. The AWS Bedrock platform offers developers access to over 100 ready-made LLMs from third parties like Anthropic and even DeepSeek, helping them accelerate their AI projects. AWS also built a family of models in-house called Nova, which can reduce development costs by up to 75% compared to other LLMs on Bedrock, and major customers like Palantir Technologies are already using them. Software is the third and final layer. Amazon embedded an AI-powered virtual assistant into AWS called Q, which can help businesses identify trends in their data, write computer code for software projects, and perform other tasks. Amazon used Q internally late last year for a project that saved the company $260 million and an estimated 4,500 developer years, according to CEO Andy Jassy on the fourth-quarter earnings call. Q's capabilities will expand over time, creating new revenue streams for AWS. AWS generated $107.5 billion in revenue during 2024. Even though that represented just 16.8% of Amazon's total revenue of $637.9 billion, it accounted for 58% of the company's total $68.6 billion in operating income. In other words, the cloud platform is the profitability engine behind Amazon's empire. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MDgwNzMvYW1hem9uLWxvY2tlci13aXRoLXBhY2thZ2UtaW5zaWRlLnBuZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="420" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MDgwNzMvYW1hem9uLWxvY2tlci13aXRoLXBhY2thZ2UtaW5zaWRlLnBuZyZ3PTcwMA"/>Image source: Amazon. </div> <h2>AI is also driving efficiency in its e-commerce business</h2> Although AWS is the core focus for Wall Street analysts and investors, e-commerce remains Amazon's largest business unit by revenue. It typically operates on razor-thin profit margins because the company aims to provide consumers with ultra-low prices, but it's finding new ways to unlock efficiency, including through the use of AI. The company transformed its logistics network in 2023 by breaking the U.S. market into eight distinct regions. It allows the company to store different products in different fulfillment centers depending on their popularity in a given region, so they travel shorter distances to reach consumers, thus reducing costs. AI has played a key role in this transition by improving forecasting by 10% and increasing the accuracy of regional predictions by 20%, management says. Overall, the company said it reduced its cost-to-serve globally during 2024 for the second year running, with further improvements to come. The use of AI in e-commerce also extends to the shopping experience. The company developed an AI assistant called Rufus, which can help customers compare products to make the most-informed decisions. Then there is Amazon Lens, a tool that uses AI and computer vision to find products based on photos a shopper has taken in the real world. Management also said that it built a generative AI application for its third-party sellers that can fill in important details when they are creating a new product page. Not only does this speed up the process, but it also ensures they are including crucial details that help their products rank highly in the website's search results. <h2>The path to the $3 trillion club</h2> The improved efficiencies in Amazon's e-commerce segment, combined with the strong year for AWS, helped the company generate a record $5.53 in earnings per share (EPS) during 2024, a 90% increase from the previous year. That places Amazon stock at a price-to-earnings ratio (P/E) of 40.9. It's still a premium to the Nasdaq-100 index, which represents all of Amazon's big-tech peers and trades at a P/E of 33.8. However, the picture looks a little different when we consider the company's potential. Wall Street's consensus forecast (provided by Yahoo!) suggests Amazon could generate $7.60 in EPS during 2026, which places its stock at a forward P/E of just 29.9: <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/3e91ad96bbe1c21b0aa52eedb7724e89.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="456" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/3e91ad96bbe1c21b0aa52eedb7724e89.png"/> AMZN PE Ratio data by YCharts In other words, Amazon stock would have to rise by 36.7% over the next two years just to maintain its current P/E of 41.3, which would place the company's market cap at $3.3 trillion. Of course, this scenario hinges on Amazon meeting Wall Street's expectations. I think that is extremely likely, considering Amazon actually beat the Street's EPS estimates by an average of 22.6% over the last four quarters. And Jassy believes the AI business within AWS could have grown even faster in 2024 if not for capacity constraints, meaning it simply didn't have enough data centers to meet demand from developers. He believes those constraints will ease in the second half of 2025, paving the way for AWS to potentially deliver accelerated revenue growth. Since it's the profit engine behind Amazon, that should also lead to much better earnings. If the company continues to exceed EPS expectations in 2025 and 2026, it could reach the $3 trillion club with an even lower P/E. </div>

Nvidia will release its first quarter report for fiscal year 2026 ending April 27, 2025. 

According to analysts surveyed by FactSet, Nvidia's first-quarter revenue is expected to increase 66% year-on-year to $43.3 billion; adjusted earnings per share will increase 44% year-on-year to $0.88. The growth rate of revenue and profits has slowed significantly compared with the same period last year. In the same period last year, Nvidia's revenue increased by 262% year-on-year, and its adjusted earnings per share increased by 461% year-on-year.

Nvidia will release its first quarter report for fiscal year 2026 ending April 27, 2025. According to analysts surveyed by FactSet, Nvidia's first-quarter revenue is expected to increase 66% year-on-year to $43.3 billion; adjusted earnings per share will increase 44% year-on-year to $0.88. The growth rate of revenue and profits has slowed significantly compared with the same period last year. In the same period last year, Nvidia's revenue increased by 262% year-on-year, and its adjusted earnings per share increased by 461% year-on-year.

NVIDIA Financial Results for Q4 Fiscal 2025

AMZN

Amazon is predicted to join the $3 trillion club by 2026, following tech giants like Apple, Nvidia, and Microsoft. With a current market cap of $2.4 trillion, Amazon's growth is driven by its cloud computing arm, AWS, which generated $107.5 billion in revenue in 2024. AI advancements are enhancing efficiency in both AWS and e-commerce operations, contributing to a record $5.53 EPS in 2024, a 90% increase from the previous year. The company's strategic use of AI in logistics and customer experience is expected to further boost profitability.

- Amazon is predicted to join the $3 trillion market cap club within two years, currently valued at $2.4 trillion, driven by its strong earnings growth and leadership in AI.  
- Amazon Web Services (AWS) is a key profit generator, contributing significantly to the company's operating income and enhancing efficiency in both cloud and e-commerce operations through AI innovations.  
- With a projected earnings per share increase and easing capacity constraints, Amazon is well-positioned to meet Wall Street expectations and potentially achieve a market cap of $3 trillion by 2026.

Prediction: This Spectacular Stock Will Join Nvidia, Apple, and Microsoft in the $3 Trillion Club in 2026