On Wednesday, Amazon's stock price rose by over 4% to $194.80, reaching a market cap of $2 trillion for the first time. According to reports on the same day, Amazon will launch a discount zone similar to Temu on its website, marking its strongest response yet to the rapid growth of low-price websites such as Temu and Shein.
On Wednesday, Amazon's stock price closed up nearly 4% at $193.61, marking the first time its market cap has reached the $2 trillion threshold.
Amazon is the latest giant to reach a market cap of $2 trillion or more.$Alphabet-A (GOOGL.US)$It broke the $2 trillion threshold at the end of April, while the market cap of other companies has surpassed $3 trillion. The market cap of major American tech giants continues to reach new milestones, highlighting the continued stock market frenzy brought on by artificial intelligence.$NVIDIA (NVDA.US)$, $Microsoft (MSFT.US)$ and $Apple (AAPL.US)$In the past year, Amazon's stock price has been significantly boosted by cost cutting and restructuring of its business to better utilize the AI trend. In addition, its key Amazon Web Services (AWS) business showed signs of a growth resurgence, which is a major factor driving investor optimism.
Since releasing its first quarter financial report this year, Amazon's stock price has been volatile. At that time, the report showed that its cloud computing department recorded the strongest sales growth in a year, helping its stock price rebound and surpassing its historical high in April. In June, Amazon's stock price rebounded significantly, with a rise of about 10% since June, recovering lost ground from the end of May, and has risen about 27% since the beginning of this year.
Over the past year, Amazon's stock price has been significantly boosted by cost cutting and restructuring of its business to better utilize the AI trend. In addition, its key Amazon Web Services (AWS) business showed signs of a growth resurgence, which is a major factor driving investor optimism.
Analysts at Morningstar Investment Services say that Amazon's strong performance in the past 6 to 9 months is partly due to overselling at the end of 2022.
A discount zone similar to Temu will be launched.
On the same day, it was reported that Amazon plans to launch a new section on its shopping site specifically selling low-priced goods shipped directly from Chinese warehouses to overseas consumers. This is Amazon's strongest response to the rapid growth of low-priced websites such as Temu and Shein.
This new section of Amazon will offer unbranded fashion products, housewares, and daily necessities. Orders take 9 to 11 days to reach customers. Amazon told Chinese sellers at a recent closed-door meeting that it will sign up merchants starting this summer and will start accepting inventory in the fall.
In recent years, Temu and Shein have achieved tremendous growth among American shoppers by offering ultra-low-priced goods shipped directly from China. This has sparked internal debates at Amazon on how to respond. For a long time, Amazon has promoted the quick shipping times of its large American distribution network.
There will be a new section on Amazon's homepage that leads shoppers to browse for cheap goods. Sellers joining this section can decide on their product selection and pricing and can produce in small batches to test demand for their planned new products. This model is similar to Shein, which allows its suppliers to produce popular products in small quantities to reduce unsold inventory.
Compared to Temu, Amazon seems to be taking a more relaxed approach to new products. Temu decides what products sellers sell and their prices, and acts as the seller's marketer and storefront operator.
It is not yet clear whether Amazon's related shipments will use US trade terms, which exempt US tariffs for individual packages with a value below $800.
An Amazon spokesperson said: 'We have always been exploring new ways to collaborate with our selling partners to delight our customers through more choices, lower prices and greater convenience.'
After the news was announced, the stock price of the parent company of Temu fell more than 2%, while the stock price of Etsy Inc (ETSY.US) fell 1% and Amazon's stock price increase widened. The stock price of Pinduoduo (PDD.US) closed down 1.3%, while the stock price of Etsy was roughly flat.$PDD Holdings (PDD.US)$$Etsy Inc (ETSY.US)$
Editor / jayden