Amazon vs. Microsoft: Race to $3 trillion

What happened: Amazon's market value surged past $3 trillion on August 3, driven by strong earnings and AI-fueled demand for its cloud services. Meanwhile, Microsoft's market cap fell to $2.8 trillion after a 22% drop this year. Both companies are investing heavily in AI, with Microsoft's AI run rate at $37 billion and Amazon burning $18 billion quarterly to build silicon infrastructure.

Market impact: The AI boom is driving growth in cloud computing services, benefiting companies like Amazon and Microsoft. Taiwan Semiconductor and Broadcom are also poised to gain from the AI build-out. Amazon's better positioning in the AI space could see it surpass Microsoft's market cap and join the $3 trillion club by the end of summer.

What to watch next: Amazon's next earnings report (July 28, 2023) will provide insight into its AI growth trajectory. Microsoft's earnings (October 24, 2023) will offer a chance to assess its AI progress. Additionally, keep an eye on AI-related product announcements and partnerships from both companies.