On September 4, Amazon’s total market value surged to over $1trn, thanks to a rise in its share prices, which reached $2,050.50. However, by the time markets closed, shares had fallen back to $2,039.51, pricing the e-commerce titan at just below the trillion dollar mark.
Amazon is the second publicly traded company in history to reach 13-digit territory; it was pipped to the post by Apple on August 3 this year. The two firms now make up over 8 percent of the entire value of the S&P 500, according to Howard Silverblatt, a senior index analyst for S&P. While Amazon’s market value has already faltered, Apple’s has continued to grow and is currently worth around $110bn more than Amazon’s.
While Amazon’s market value has already faltered, Apple’s has continued to grow
Amazon began publicly trading in 1997 at $18 a share. The stock surpassed $1,000 a share in 2017 and has experienced astronomical growth since then.
In Q2 of this year, Amazon’s net income was $2.5bn, compared with just $197m in the same period of last year. This significant increase in revenue was driven by the success of the company’s cloud computing arm, Amazon Web Services, which is on track to generate $25bn in revenue this year.
Amazon founder Jeff Bezos is worth almost as much as Bill Gates and Warren Buffet put together; his net worth stands at $161bn at the time of publication.
Amazon currently captures 49 cents of every e-commerce dollar in the US, generates $178bn in annual revenue and has 550,000 employees. In an attempt to diversify its business model and expand into different markets, the firm has made some significant acquisitions, including the $13.7bn purchase of Whole Foods in August 2017, and the $1bn acquisition of PillPack in July of this year.
This valuation will not come as a surprise to market analysts; for many, it was not a case of if Amazon would hit $1trn, but when. Wall Street is now keeping a close eye on which firm will take the bronze in the race to reach 13 digits. Microsoft and Alphabet are the next largest firms, but both are currently over $100bn short of the mark. In terms of expansion, experts have their eyes on Facebook as being the fastest-growing firm over the next 12 months, but it has a very long way to go before joining the four comma club.