E-commerce and cloud services giant Amazon.com on Tuesday briefly hit US$1 trillion in market value, becoming the second firm after Apple to attain that milestone.
Shares of the Seattle-based company traded as high as US$2,050.50 on the Nasdaq market, taking the valuation past the trillion-dollar mark, Reuters reports.
However, the stock came off the highs to end the session at US$2,039.51, up 1.3 percent from the previous close but with the market value slipping back below the US$1 trillion level.
As of Tuesday close, Amazon’s market cap stood at around US$995 billion, leaving Apple as the only publicly listed entity that is valued at more than a trillion.
Analysts believe it is only a matter of time before Amazon eclipses Apple in market value, given the former’s stronger pace of revenue growth.
Amazon’s stock price has more than doubled in a year as it grew rapidly in retail and cloud computing.
Apple took almost 38 years as a public company to achieve the trillion dollar milestone, while Amazon got there in 21 years, Reuters noted.
Apple reached US$1 trillion market value on Aug. 2, becoming the first company ever to attain the benchmark.
While Apple’s iPhone and other devices remain popular and its revenues are growing, it is not keeping up with Amazon’s blistering sales growth.
“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,” Daniel Morgan, portfolio manager at Synovus Trust in Atlanta, told Reuters.
He described cloud services as Amazon’s “crown jewel.”
In the second quarter, the cloud unit accounted for 55 percent of Amazon’s operating income and 20 percent of total revenue, according to Morgan.
Apple started trading in December 1980 but its stock did not truly start to take flight for another 25 years, spurred by the iPhone, the breakthrough device that left competitors in the dust.
Amazon, which was founded as an online book-retailer in Chief Executive Jeff Bezos’ garage in 1994, started trading on May 15, 1997 at US$1.50 on a split-adjusted basis.
By October 2009 it had risen to US$100 and the stock hit US$1,000 for the first time on May 30, 2017. It has held above that level since Oct. 27, 2017.
Just 10 months later, on Aug. 30, Amazon shares hit US$2,000 for the first time, just US$50 per share away from giving the company a $1 trillion market value, Reuters noted.
The stock is up 74.5 percent year to date. In comparison, Apple has risen about 35 percent in 2018.
Analysts expect Apple’s revenue to jump 14.9 percent in its fiscal year ending in September, according to Thomson Reuters data, a hefty rise but still far short of Amazon’s expected revenue growth of 32 percent for 2018.
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