Amazon touches $1 trillion, on pace to overtake Apple
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[September 05, 2018]
By Sinéad Carew and Noel Randewich
(Reuters) - Amazon.com Inc <AMZN.O> on
Tuesday briefly joined Apple Inc <AAPL.O> to become the second $1
trillion publicly listed U.S. company after its stock price more than
doubled in a year as it grew rapidly in retail and cloud computing.
Its shares traded as high as $2,050.50 before easing a little to end the
session at $2,039.51, up 1.3 percent and just short of the milestone
level of $2,050.2677.
If the online retailer's shares keep up their recent pace, it would be a
matter of when, not if, Amazon's stock market valuation eclipses that of
iPhone maker Apple, which reached $1 trillion on Aug. 2.
Apple took almost 38 years as a public company to achieve the trillion
dollar milestone, while Amazon got there in 21 years. 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 has impressed investors by diversifying into virtually every
corner of the retail industry, altering how consumers buy products and
putting big pressure on many 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."
(Graphic: Amazon vs. Apple: https://reut.rs/2PwtdRg)
Amazon also provides video streaming services and bought upscale
supermarket Whole Foods. And its cloud computing services for companies
have become its main profit driver.
"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 who describes Amazon's cloud services as its
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The Amazon.com logo and stock price information is seen on screens
at the Nasdaq Market Site in New York City, New York, U.S.,
September 4, 2018. REUTERS/Mike Segar
In the second quarter the 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 - founded as an online book-retailer in Chief Executive Jeff Bezos'
garage in 1994 - started trading on May 15, 1997 at $1.50 on a split-adjusted
By October 2009 it had risen to $100 and the stock hit $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 $2,000 for the first time,
just $50 per share away from giving the company a $1 trillion market value.
(Graphic: Analyst Price Targets: https://reut.rs/2NHwHQq)
The stock is up 74.5 percent year to date. In comparison, Apple has risen about
35.0percent 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.
(Reporting by Sinéad Carew in New York and Noel Randewich in San Francisco;
additional reporting by Lewis Krauskopf in New York; Editing by Susan Thomas and
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