Shares of tech giant Amazon.com Inc. have rallied sharply in recent weeks, climbing to fresh all-time highs following the release of its quarterly report. A 27% surge in stock price over the past month has led investors to notice how cloud technologies and custom chip manufacturing are becoming a powerful foundation for the company’s long-term dominance.

Amazon shares traded at record levels after the AWS unit showed accelerating revenue growth of 28% year-over-year. The company’s operating income in the first quarter jumped to $23.9 billion, with more than half of this amount (59%) contributed by the cloud segment, despite it accounting for only a fifth of total sales.

Current business performance gives Amazon a market valuation that analysts consider justified even after the rally. According to CEO Andy Jassy, if Amazon’s chip business were a standalone company, its annual revenue would reach $50 billion, making it one of the top three data center semiconductor producers in the world alongside Nvidia and Intel.

Amazon has successfully overcome skepticism regarding its hardware ambitions. Through its proprietary Trainium and Graviton processors, the company has built a competitive moat that allows it to offer superior terms for AI computing. Despite massive capital expenditures exceeding $43 billion for the quarter, investors are betting that leadership in data infrastructure will ensure the company’s resilience for decades to come.