Amazon becomes second US firm to hit $1 trillion market value

Online retailer’s success puts founder Jeff Bezos on top of Forbes billionaires list

Amazon has revolutionised how people shop online and is the world’s dominant internet retailer. Photograph:  Lionel Bonaventure/AFP/Getty Images

Amazon has revolutionised how people shop online and is the world’s dominant internet retailer. Photograph: Lionel Bonaventure/AFP/Getty Images

 

Amazon. com on Tuesday joined Apple to become the second $1 trillion publicly listed US company after its stock price more than doubled in a year as it grew rapidly in retail and cloud computing.

If the online retailer’s share gains keep up the 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 August 2nd.

Apple took almost 38 years as a public company to achieve the trillion dollar milestone, while Amazon got there in 21 years.

Amazon has revolutionised how people shop online and is the world’s dominant internet retailer. The company’s success put its founder and chief executive Jeff Bezos top of the Forbes billionaires list this year.

The Seattle-based company has cemented customer loyalty through smart devices like Alexa and the Prime membership programme that offers fast, free shipping as well as music and video streaming perks.

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 from what was originally just an online bookstore into virtually every corner of the retail industry, altering how consumers buy products and putting big pressure on many brick-and-mortar stores.

Dominance

“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.”

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, Georgia who describes Amazon’s cloud services as its “crown jewel.”

Amazon’s stock is up 74.5 per cent in the year to date. In comparison, Apple has risen about 35 per cent in 2018. – Reuters