Amazon Joins Apple in The $1 Trillion Club

Nearly a month after Apple became the world’s highest valued company, one of the biggest online marketplaces on the interwebs, Amazon, has also joined it in the $1 trillion valuation club.

According to a senior analyst at S&P, Howard Silverblatt, the two companies are collectively worth 8% of the total S&P 500 Index’s value.

Unlike Apple which was formed back in 1972, Amazon is just 24 years old and still managed remarkable progress during that time. Comparing Amazon against the regular, brick and mortar multi stores like Walmart in the US, you’ll need to “add up the valuations of the 14 largest big-box retailers ranked by 2017 revenues,” according to CNN Money, to reach the $1 trillion mark.

Historically Amazon hasn’t been very profitable over the years, reinvesting a lot of its profits back into the business to buy more companies, introduce new tech etc.

Massive Improvements in Just a Year

Going by the numbers, at the start of 2018, Amazon was valued at $580 billion. In Q2 2018, the company’s net income soared to $2.5 billion, several times higher than the $197 million it earned in Q2 2017.

Amazon Web Services was instrumental in the company’s success, as well as its Prime membership subscriptions and its advertisement section, propelling Amazon’s value past $1 trillion.

Morgan Stanley (MS), a famous financial banking and investment firm based in Broadway has raised Amazon’s price target to $2,500, which would make the company’s worth balloon to $1.2 trillion, with revenue growth being projected to increase 24% by 2020. MS values the previously mentioned Amazon Web Services, which powers all manner of organizations ranging from small-scale startups to even America’s CIA, at $375 billion.

Winning Over Skeptics

Amazon has also turned former skeptics who thought that the company’s stock was overvalued back in 2017 have also started believing in the company after this achievement.

Head of an independent research firm, Daniel Martins was one such skeptic, who said that the company’s stock was too expensive back in 2017 due to optimistic growth expectations.

Now, after analyzing the most recent financial results put out by Amazon and evaluating the company’s aggressive push into other markets and industries, he says that its value will double by 2020.

He adds,

It’s too high of a bar to assume that they’ll succeed at everything that they do. But at the same time, I think Amazon is the best combination in the world of the scale of a large company and that entrepreneurial DNA with the spirit of a startup.

I guess now it’s off to see which company gets to the $2 trillion valuation level first.

Via CNNMoney

A techie, gamer, and Senior Editor at ProPakistani.



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