Amazon’s (AMZN Quick QuoteAMZN - Free Report) share price reached an all-time high of $187.29 during the intraday trading on Monday, surpassing its record closing price of $186.57 in July 2021, which was marked the highest in the pandemic-led booming era for internet and e-commerce stocks. It was the first time the stock soared this high in the post-pandemic period. Moreover, the e-commerce and cloud giant’s market capitalization is moving closer to $2 trillion, which is noteworthy ahead of its first-quarter 2024 earnings.

The surge reflects investor confidence in Amazon's robust retail business, strengthening cloud division, growing investments in generative AI, solid advertising business, and expanding streaming services.

AMZN has gained 21.8% year to date, outperforming the S&P 500’s rally of 9.5%, and the Zacks Internet-Commerce industry’s and Zacks Retail-Wholesale sector’s returns of 11.6% and 8.8%.

However, the looming question remains — can Amazon sustain this momentum?

Strength in Amazon Web Services (AWS) to Aid Growth

The company’s cloud computing arm, AWS, dominates the cloud market on the back of its robust portfolio. In this regard, AWS’s growing efforts to power its cloud services with generative AI remain noteworthy.

AWS offers Amazon Bedrock, which has provided it with a breakthrough in the generative AI space. Amazon Bedrock offers seamless access to high-performing foundation models from AI companies through an API.

The company’s recent collaboration with NVIDIA (NVDA Quick QuoteNVDA - Free Report) through which it will make the latter’s NVIDIA Blackwell GPU platform available on AWS, remains a plus. This will aid in speeding up inference workloads for resource-intensive, multi-trillion-parameter language models.

Further, AWS will offer NVIDIA GB200 Grace Blackwell Superchip and B100 Tensor Core GPUs. AWS also intends to provide Amazon Elastic Compute Cloud instances, backed by NVIDIA Grace Blackwell GPU.

Growing generative AI efforts are expected to aid Amazon in capitalizing on the immense growth prospects in the generative AI market. Per an Allied Market Research report, the global generative AI market is likely to hit $191.8 billion by 2032, witnessing a CAGR of 34.1% between 2023 and 2032.

In addition to generative AI efforts, AWS’s expanding data center network, and an increasing number of AWS Regions and Availability Zones are expected to continue aiding it in offering low latency and access to its robust cloud portfolio, including AI, machine learning, data analytics and the Internet of Things to the customers seamlessly. This, in turn, will drive its customer momentum.

Currently, AWS has 105 Availability Zones across 33 geographic regions. It further plans to launch 15 more Availability Zones and five more AWS Regions in Malaysia, Mexico, New Zealand, Thailand, and the AWS European Sovereign Cloud.

The Zacks Rank #3 (Hold) company’s aggressive expansion efforts are expected to continue aiding its competitive prowess against its strong peers, such as Microsoft (MSFT Quick QuoteMSFT - Free Report) and Alphabet’s (GOOGL Quick QuoteGOOGL - Free Report) Google. Both companies are leaving no stone unturned to boost their presence in the promising cloud market.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Microsoft Azure became the key driver for MSFT. Microsoft Azure's increasing number of availability zones and regions across the globe, and its growing efforts to integrate generative AI into the cloud are likely to continue driving the company's cloud momentum in the near term.

Azure is operating in more than 60 cloud regions at present.

Similarly, Google Cloud contributes substantially to Alphabet's total revenues. Expanding data centers, availability zones, increasing generative AI investments and cloud regions are expected to keep boosting Alphabet's cloud position.

Looking across the world, the total number of Google Cloud regions is currently 39, with 118 zones and 187 network edge locations.

Prime Momentum to Note

Amazon’s solid Prime momentum, along with its strengthening distribution network, is continuously benefiting its online retail business. Prime benefits, including a strong loyalty system, customer-friendly offers, quick grocery delivery services and robust Prime Free One-Day and Prime Free Same-Day Delivery services, are driving the company’s customer momentum.

Apart from this, strengthening relationships with third-party sellers remains a major positive for its e-commerce business.

The company’s concerted efforts to bolster its online pharma business on the back of expanding same-day medication delivery service and strategic partnerships remain noteworthy.

AMZN’s growing grocery retail business, on the back of solid momentum across its Fresh grocery stores and a solid network of Whole Foods Store across the United States, is a plus.

All these factors are expected to aid Amazon in sustaining its dominance in the online retail space, as well as expanding its footprint in the offline retail market.

Coming to the streaming space, growing momentum in Prime Video on the back of expanding original content, regional content and the sports content portfolio, is constantly driving the Prime subscription of the company.

We note that retail perks associated with Prime, along with strength in Prime Video, are likely to continue driving growth in Amazon’s subscription revenues in the days ahead.