On Wednesday, Amazon's stock price surged by more than 4% during trading, reaching $194.80, with its market capitalization hitting the $2 trillion milestone for the first time.

Amazon is the latest giant to join the ranks of companies with a market capitalization of $2 trillion or more. Alphabet, Google's parent company, crossed the $2 trillion threshold at the end of April, while Nvidia, Microsoft, and Apple have all surpassed the $3 trillion mark. The continuous breakthroughs in market capitalization of several major U.S. tech giants highlight the ongoing stock market boom driven by artificial intelligence.

Since releasing its financial report for the first quarter of this year, Amazon's stock price has shown a volatile trend. The report indicated that its cloud computing division recorded the strongest sales growth in a year, helping its stock price rebound and break through the historical high set in April. In June, Amazon's stock price rebounded significantly, with a rise of about 10% so far this month, recouping losses from the end of May, and has risen about 27% year-to-date.

Over the past year, Amazon's stock price has been significantly boosted as the company cuts costs and restructures its business to better capitalize on the AI boom. Additionally, its key Amazon Web Services (AWS) business shows signs of renewed growth acceleration, which is a major factor for investor optimism.

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Analysts at Morningstar Investment Services have stated that the good performance of Amazon's stock over the past 6-9 months is partly related to the overselling at the end of 2022.

Plans to Launch a Discount Section Similar to Temu

Also reported on the same day, Amazon plans to introduce a new section on its shopping website dedicated to selling low-cost goods that are directly shipped from Chinese warehouses to overseas consumers. This is Amazon's strongest response yet to the rapid growth of low-price websites like Temu and Shein.

Amazon's new section will offer unbranded fashion products, home goods, and daily necessities, with orders taking 9 to 11 days to reach customers. In a recent closed-door meeting with Chinese sellers, Amazon announced that it will begin signing up merchants this summer and start accepting inventory in the fall.

In recent years, Temu and Shein have achieved significant growth among U.S. 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 fast shipping times of its vast U.S. distribution network.

There will be a new section on Amazon's website homepage, guiding shoppers to browse low-cost goods. Sellers who join this section can decide on their product selection and pricing independently and can produce in small batches to test the demand for new products they plan to launch. This model is similar to Shein, which allows its suppliers to produce popular goods in small batches to minimize unsold inventory.Compared to Temu, Amazon seems to have taken a more relaxed approach to new products. Temu decides what products sellers offer and their prices, and also conducts marketing and store operations on behalf of sellers.

It is currently unclear whether Amazon's related shipments will use the U.S. trade terms, which exempt individual packages valued below $800 from U.S. tariffs.

An Amazon spokesperson said, "We are constantly exploring new ways to cooperate with our sales partners in order to please our customers with more choices, lower prices, and greater convenience."

After the relevant news came out, the stock price of Pinduoduo, the parent company of Temu, fell by more than 2%, and Etsy's stock price fell by 1%, while Amazon's stock price increased. Pinduoduo's stock price closed down 1.3%, while Etsy's stock price remained roughly flat.