Amazon on Thursday notched its first record-high closing price in nearly three years, marking a full comeback from its slump in 2022. The new high mark came the same day that Chief Executive Andy Jassy told shareholders that Amazon is investing to ensure its leadership in generative artificial intelligence.
In his annual letter to shareholders, Jassy highlighted the tech giant's approach to generative AI, which he described as Amazon's potential next pillar of growth, following its e-commerce marketplace, Prime subscription services and Amazon Web Services cloud-computing business.
"Generative AI may be the largest technology transformation since the cloud (which itself, is still in the early stages), and perhaps since the Internet," Jassy wrote. "Unlike the mass modernization of on-premises infrastructure to the cloud, where there's work required to migrate, this GenAI revolution will be built from the start on top of the cloud. The amount of societal and business benefit from the solutions that will be possible will astound us all."
Meanwhile, Amazon stock gained 1.7% to close at 189.05 on the stock market today. That's a record high close for the tech giant. The last time Amazon had a record close was July 8, 2021. Shares ended that day trading at $186.57, according to Dow Jones Market Data
Jassy: Amazon Targets Three Layers of AI
Amazon Web Services leads the market for renting cloud-computing power to enterprises. The company has been spending big — including a recent $4 billion investment in AI startup Anthropic — to offer a broader set of generative AI services on AWS.
Jassy said Amazon believes there are three layers for generative AI software development, "each of which is gigantic, and each of which we're deeply investing," Jassy wrote.
He cited the bottom layer of providing the computing power to train AI models; a middle layer that helps companies apply their own data to AI models; and a top layer of actual AI applications.
Amazon has its own set of custom computing chips serving the bottom layer, Jassy said. Meanwhile, its Amazon Bedrock service helps companies access AI models. At the top layer, Amazon has applications such as the Amazon Q coding assistant and its Rufus AI-powered shopping assistant.
Amazon is building a "substantial number" of its own generative AI applications, Jassy said. He expects the vast majority of applications will be built by other companies. But he expects many will do so while using Amazon's tools at each layer of AI development.
"We're optimistic that much of this world-changing AI will be built on top of AWS," Jassy said.
Amazon Stock: Back At All-Time High
Jassy also detailed advances for the company's goal of lowering e-commerce delivery costs, its growing advertising business and plan to launch commercial satellites. You can read the full letter here.
Amazon's ability to win generative AI business has been in focus for investors since ChatGPT was introduced in late 2022. The company is competing to offer cloud-based AI services against Microsoft, which has a partnership with OpenAI, the startup behind ChatGPT.
But Amazon stock overall is off to a strong start in 2024. Shares are up 24% since the start of the year, following a more than 80% gain in 2023.
With Thursday's action, Amazon has fully bounced back from a down period from in late 2021 to early 2023. Amazon stock fell nearly 50% in 2022. The company is last among the trillion-dollar tech giants to make a full recovery after the post-pandemic selloff of 2022.
Facebook-parent company Meta reached a new record high close in January. Microsoft, Apple, Alphabet and Nvidia each recovered to new all-time highs at various points last year.
