Amazon’s stock crosses $2050.27 on Tuesday becoming the second publicly traded U.S. Company to hit $1 trillion in market value after Apple. It is an incredible achievement for a 24-year-old company. A year ago the company was worth half than what it is now.
Amazon’s valuation makes it the second company to hit the trillion dollar mark. Apple became the first one in August 2018. For Amazon, the trillion dollars mark is the cherry on top of a blockbuster year.
According to a New York University finance professor and valuation expert Aswath Damodaran, Amazon’s price-to-earnings ratio is about 180.
Its stock has risen over 100% in the last 12 months. The company has long been known for having meager profits, but a high stock price.
At the beginning of 2018, the company was worth just $580 billion. In the second quarter, the company’s net income ballooned to $2.5 billion, compared to $197 million in the second quarter of 2017, reports CNN.
It’s not only the Apple and Amazon; the tech industry, in general, had a great year. As per many analysts, tech has driven a record high for NASDAQ and S and P 500.
“More broadly in technology, I don’t we have that many troubles. So unlike in the 1990’s, when the sort of silly stocks, the internet stocks that had no profit and had no prospect of ever having profits kind of brought overall market valuation up with it into the stratosphere, that is not the case for technology sector more broadly”, said Liz Ann Sonder, Chief Investment Strategist, Charles Schwab.
As Amazon hits 1trillion dollar, Microsoft and Google’s parent company Alphabet trail closely behind as they are the next prospective members to join the trillion dollar club.
About Amazon
Amazon is an American electronic commerce and cloud computing company based in Seattle, Washington; Jeff Bezos founded that on July 5, 1994. The tech giant is the largest Internet retailer in the world as measured by revenue and market capitalization and second largest after Alibaba Group regarding total sales.
The amazon.com website started as an online bookstore and later diversified to sell video downloads/streaming, MP3 downloads/streaming, audiobook downloads/streaming, software, video games, electronics, apparel, furniture, food, toys, and jewelry. The company also produces consumer electronics—Kindle e-readers, Fire tablets, Fire TV, and Echo—and is the world’s largest provider of cloud infrastructure services (IaaS and PaaS). Amazon also sells certain low-end products under its in-house brand Amazon Basics.
