Amazon.com Inc on Tuesday briefly joined Apple Inc 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% 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, its 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.
The company 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."
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 "crown jewel."
More To Come
In the second quarter, the unit accounted for 55% of Amazon's operating income and 20% of total revenue, according to Morgan.
Analysts expect Apple's revenue to jump 14.9% 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% for 2018.
During the summer, Amazon said that it will add more than 1,000 new jobs in Ireland over the next two years, taking its workforce to more than 3,500 in a country that continues to be a magnet for major technology firms.