“Apple Inc. may have gotten there first, but Amazon.com’s rapid ascent to a $1 trillion market value should put the iPhone maker on notice that its days as the world’s most valuable company are numbered,” Dan Gallagher writes for The Wall Street Journal. “On Tuesday, Amazon became the second U.S. company to reach a market value of $1 trillion. That happened barely a month after Apple crossed that threshold.”
“Amazon’s price didn’t hold that level for long during a rather rough day overall for stocks, but it is still notable how quickly the e-commerce giant has covered ground,” Gallagher writes. “At the start of the year, Amazon was worth about $566 billion while the iPhone maker was worth about $860 billion. That is a 77% jump for Amazon compared with Apple’s 16% rise. Put another way, the gap in market value between the two largest tech giants has narrowed from 34% to about 9% in eight months.”
Amazon’s “market value of $1 trillion puts the stock a little over 100 times forward earnings compared with 17 times for Apple,” Gallagher writes. “Apple’s current multiple is the highest the stock has fetched since 2010, though, while Amazon’s has fallen by nearly 40% since the start of the year thanks to the company’s rising bottom line.”
Read more in the full article here.
MacDailyNews Take: We’ll see how accurate the WSJ’s crystal ball is when it comes to predicting future valuations.
SEE ALSO:
Amazon briefly joins Apple in the $1 trillion club before falling back – September 4, 2018
Apple will outperform Amazon in the next few years, says Gene Munster, Loup Ventures, joins the ‘Squawk Alley team to discuss Amazon’s future after the tech stock hit its $1 trillion valuation.
The first non profit to one trillion….
Amazon is overrated. I wouldn’t buy their stocks. It’s too risky for me. But I don’t care if they will have a greater market value than Apple. What I care for is good Apple products and a solid Apple stock.
I remember how all the Apple bulls used to laugh at Amazon for not turning a profit. Now comes the ultimate insult for those Apple bulls as Amazon simply comes from behind and leaves Apple in the dust in terms of market cap. Amazon is valued by Wall Street so much higher than Apple it’s really just disheartening. Just think if Apple had taken some of that money and bought a cloud computing business. There were probably any number of decent companies Apple could have purchased cheaply. Now, Amazon gets constant praise from Wall Street telling how AWS has unlimited growth potential while iPhone sales become stagnant. In fact, it seems as though all tech companies with cloud computing are valued far higher than Apple. Apple had the chance to become untouchable in value considering it was sitting on such a huge cash pile to acquire any business it wanted.
Amazon shareholders are going to be laughing hard at Apple shareholders as Wall Street predicts Amazon to be worth twice as much as Apple in a couple of years. At least I know where some of Apple’s money is going. It’s going into my pockets as quarterly dividends. However, it’s just amazing how Amazon seems to be gathering such huge amounts of money on a daily basis while Apple appears to be making almost nothing. Not one thing was ever said about Amazon hitting the law of large numbers like they always said about Apple. No one ever said anything about Amazon having pullbacks, either. Amazon stock just keeps going straight up like it was on afterburners while Apple stock was always sputtering every few months as the critics shouted about shrinking iPhone sales.
Apple is already seen as a trillion-dollar loser company whenever it’s compared to Amazon. Imagine that. Apple won’t even be able to hold the market cap crown for a full month. The big investors will just keep pouring money into Amazon until it blows past Apple in value. A P/E of 160 is no joke. What’s even worse is Wall Street says Apple is OVERVALUED and Amazon is UNDERVALUED. That has to pierce like a knife into the heart of Apple bulls and there’s nothing Apple can do to keep pace with Amazon. Jeff Bezos has turned out to be King Midas squared. Jeff Bezos can do no wrong. Apple is already considered #2 and merely a placeholder for Amazon as far as Wall Street is concerned. Dead man walking.
Stop acting like a loser. Your whining about markets being unfair or biased is sickening. Don’t you realise that markets are statistical constructs, not rational thinkers? Markets are not human, get it through your head. They are artifacts of human activity. As artifacts, not humans, they can’t exhibit insulting or envious behaviour, nor can they crown entrepreneurs or bless them like the Pope and damn others to insignificance or Hell. Don’t you see that your anxiety about your investments has made you paranoid, seeing conspiracies of lunatics? Yes, you were wise to invest in an excellent company, but you are unwise to expect every other investor to possess your transcendental understanding of worldly affairs. I’d have expected the massive vote of confidence afforded by Warren Buffet’s putting his money where his mouth is would calm you somewhat, but that didn’t work either. You like to argue and plead, so I’d recommend considering a new career – as an attorney-at-law, or maybe as a politician. Who knows, that might be more lucrative..
‘We’re doomed I tells ya we are all doomed…’ apart from Amazon it seems. I am not quite as miserable (or whatever that weird over active emotion of yours is) about being only the second most valuable company in the World. Some of us remember when Apple were about as valuable as a piece of mud under a boot, I dread to think what size placard you would have been strutting around with back then with the END IS NIGH preaching your devilish nonsense to the masses. Your extreme over reaction is rather amusing mind, though sadly a little like when the rich used to pay to see the patients in the Asylum.
Market cap is not all that important, really. In fact, in terms of day-to-day business operations, market cap is basically irrelevant.
Amazon is enjoying a great stock ride over the past year. Bully for the corporation and Amazon shareholders…for now. But the company has to keep the EPS growing to justify the large P/E multiple. If the cannot manage that, then the share price will eventually collapse to a more reasonable valuation. It has happened many times in the past to many other companies.
And Amazon has some serious competition in various areas of its business – Alibaba, for instance. The barriers to setting up an online retail presence are low. And there are also plenty of major competitors in the cloud market. Plus, regulatory changes restricting data collection have the potential to seriously impact Amazon and Google, among others.
Either way, the market cap crown really doesn’t impact Apple (or me).
Jeff Bezos owns the Washington Post, he can control the media. That’s why there was no article bashing Amazon, the law of large numbers. Amazon profits are very humble compared to Apple. Just that Jeff Bezos knows how to manipulate the market and in total control of the press.
Nope, Amazon won’t be playing second fiddle to Apple for long….not with Sears hot on their tails!!!
(OK a little bit of humor, but who here WOULDN’T like to see Sears back in the game??)
No love for Montgomery Ward?
Used to LOVE Monkey/Ward but was more of a Sanger-Harris guy…