Amazon’s stock has been skyrocketing for the past two years, and in April 2018, the company celebrated an important milestone: valued at $768 billion, Amazon officially became the world’s second most valuable company, surpassing Google’s parent company Alphabet (valued at $716 billion) for the very first time.
Apple is still the world’s most valuable company, with a total market cap of $889 billion but with the rate Amazon is growing, this could change by 2019. Amazon has surged a jaw dropping 35 percent this year and appears to be virtually unstoppable. Back in April, the company (AMZN) reported that it made $1.6 billion in profit during the first three months of 2018. This figure is more than double last year’s profits, even as Amazon continues to invest in costly fulfillment centers and original programming.
The surprise surge in profit was driven by Amazon’s cloud computing business, Amazon Web Services, and a fast-growing advertising division that is now a multi-billion dollar business. Shares of Amazon jumped more than 7% following Amazon’s Q1 earnings results sending Amazon and Jeff Bezos on top of the world – almost! Amazon CEO Jeff Bezos also revealed in a shareholder letter in April 2017, that there were more than 100 million subscribers for Prime at the time. For those of you who don’t already know, Prime is an annual membership program that offers shipping perks and video streaming.
While Wall Street is still buzzing over Amazon’s impressive March quarter results, Amazon continues to take bold, if somewhat controversial, steps to innovate in retail. It recently opened a convenience store without checkout lines and launched a new service that delivers packages to the trunks of cars for free! It seems that when it comes to innovation Amazon is all in.
Currently, Amazon is one of the best-performing large-cap stocks in the market. Its shares rallied 30 percent in the first quarter of 2018 versus the S&P 500’s roughly flat return. The question now is not whether Amazon can surpass Apple and be the most valuable company of the world but rather: How fast can it get there?
*Please note that this article is not meant to be construed as investment advice or suggestion of an investment strategy with respect to any financial instrument.
*Sources: CNBC, Investopedia, FXStreetSTART TRADING NOW
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