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Amazon Becomes A $1 Trillion Company For A Short Time, On Way To Surpass Apple


09/05/2018


Amazon Becomes A $1 Trillion Company For A Short Time, On Way To Surpass Apple
All be it for a short period of time, but Amazon.com Inc equaled the feat of Apple Inc to become the second publicly traded US company to be valued a $1 trillion following the more than doubling of its stocks in a year driven by increased investor confidence because of its growth in retail and cloud computing.
 
On Tuesday, Amazon’s shares ended 1.3 per cent at $2,039.51 after trading as high as $2,050.50. The milestone for the company’s share value required to take the company to $1 trillion is $2,050.2677.
 
The shares of Apple crossed the $1 trillion mark on August 2 this year and according to experts, the pace at which the share of Amazon are going ahead, they believe that it is just a matter of time that it would also cross the coveted 41 trillion mark.
 
It took Apple nearly 38 years as a public company to reach the $1 trillion milestone, while Amazon achieved the mark in just 21 years. Despite the fact that the revenues of Apple and the popularity of its iPhones are constant, it is nowhere near the sale growth chart that Amazon is clocking.
 
Investors of Amazon have been impressed in the manner in which the company has been able to venture into virtually every corner of the retail industry and it has changed the way consumers purchase products and has given very serious competition to the brick-and-mortar stores.
 
“It says a lot about Amazon and its ever-increasing dominance of segments of the retailing world as well as the web services business,” said Peter Tuz, President Of Chase Investment Counsel In Charlottesville, Virginia. “They have a tiny share of the worldwide retail sales market so there’s a lot left to capture there.”
 
Video streaming services are also provided by Amazon and it has recently bought the supermarket brand Whole Foods. And yet the main profit driver of the company has been its cloud computing services.
 
“Amazon’s a little bit more dynamic than Apple because the iPhone has become more mature. Amazon’s cloud business is an extra growth driver that Apple doesn’t have,” said Daniel Morgan, portfolio manager at Synovus Trust in Atlanta. Morgan described the business to be the “crown jewel” of the company.
 
That business accounted for about 55 per cent of the operating profits of the company and 20 per cent of the total revenues of the company in the second quarter.
 
Apple became a publicly traded company in December 1980 but the stocks of the company had remained subdued until the company came up with the launch of the iPhone after almost 25 years. The iPhone changed the fortunes of the company and permanently altered the smartphone market.
 
On the other have, Jeff Bezos founded Amazon to be an online book-retailer in 1994 and it started trading as a public limited company on May 15, 1997 and the first stock price was valued at $1.50 on a split-adjusted basis.
 
(Source:www.reuters.com)


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