“Amazon.com Inc on Tuesday joined Apple Inc in the $1 trillion club, becoming the second member of the group after its stock price doubled in 15 months,” Sinéad Carew reports for Reuters. “If the online retailer’s share price continues at its recent pace, it will be a matter of when, not if, Amazon’s market valuation eclipses that of iPhone maker Apple, which reached $1 trillion on Aug. 2.”
“‘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,'” Carew reports. “In the second quarter the unit accounted for 55 percent of Amazon’s operating income and 20 percent of total revenue, according to Morgan.”
“Amazon – founded as an online book-retailer in Chief Executive Jeff Bezos’ garage in 1994 – started trading on May 15 1997 at $1.50 on a split-adjusted basis,” Carew reports. “Amazon shares were last up 1.1 percent at $2,035.69, pulling back slightly from the milestone level of $2050.2677.”
Read more in the full article here.
MacDailyNews Take: Amazon couldn’t quite hold the trillion-dollar mark and is currently worth $993.515 billion. Currently, Apple is the sole member of the $1 trillion club, valued at $1.103 trillion.
Apple might as well kiss the market cap crown goodbye. The big investors will happily push Amazon to $2500 a share and Apple will struggle to reach $250 a share. Apple’s imminent defeat is quite embarrassing considering Amazon’s golden P/E of 160. That’s what’s called true investor confidence. Apple has never had that kind of confidence backing it. With Apple, there has always been that doubt creeping in the back of investors’ minds which has lead to the relatively low P/E. Yeah, Wall Street still doesn’t get Apple, but they sure get Amazon in spades. Apple overlooked getting into the cloud computing business and all hope was gone. Tim Cook or Apple didn’t bother to listen to Wall Street’s praise of THE ALMIGHTY CLOUD. It was low-hanging fruit Apple could have easily snatched.
That’s why they’re saying even Microsoft will eventually eclipse Apple in value due to their Azure Cloud business. Some companies anticipate trends while others choose to ignore them. Apple ignored it and will likely fall victim to tech companies who went deep into the cloud. Apple had the cash but put it into buybacks. Those buybacks may have boosted Apple’s EPS but Amazon’s EPS is already higher and growing faster than Apple’s. Too bad about the cloud fish that Apple never went fishing for. Oh, well. At least Apple still has AppleWatch which Wall Street will always consider a failure with zero growth potential. As far as Wall Street is concerned, being #2 is like being dead last.
I’m getting my quarterly Apple dividends so I’ve nothing to cry about. Any company’s relative wealth can be transient as nothing is guaranteed.