Apple vs. Amazon: Who will win race to be world’s first $1 trillion company?

“The curse of the $1tn ‘buy’ note,” Lex writes for Financial Times. “At the peak of the 2000 bubble, analysts believed Cisco still had plenty of price appreciation ahead. Its stranglehold on the routers and switches that powered the dotcom age could make it the first $1tn company, Credit Suisse analysts wrote. That proved the death knell; Cisco topped out at $550bn.”

“Eighteen years on, the milestone is still elusive — and further away after the sector fell sharply on Monday,” Lex writes. “Scott Galloway, a professor at New York University, in April last year backed Amazon to get there first. It was a bold call. At the time, the ecommerce company’s equity was valued at $430bn. But in less than a year, the shares rose more than 75 per cent. It was on a trajectory to win the race — until a report last week suggested Donald Trump wanted to stop its rise.”

“So who to pick? The dull answer, the biggest and cheapest of the pack: Apple. The iPhone maker got within $80bn last month,” Lex writes. “With almost $60bn of net income, it does not even require an aggressive price/earnings multiple. ”

Read more in the full article here.

MacDailyNews Take: Apple.


  1. What difference does it make what company gets there first, if any? As long as Apple continues to pay out increasing dividends and stays where it is, I’ll be satisfied. I’ve done better than most investors by owning Apple. All this rhetoric about five companies suddenly being capable of reaching that $1T market cap is ridiculous. Apple certainly is the closest but so what. Company fortunes come and go. If a war takes place, all bets are off.

    What gets me is all those other major tech companies have some inflated P/Es and Apple’s P/E pretty much sucks compared to those other tech companies. Those other companies are constantly being pumped like crazy so it’s no wonder investors want them so badly. Only Apple is always being called doomed for reasons I’ll never quite understand.

    People keep saying Apple is doomed but it seems to be running quite well, if not exceptionally. No company can have double-digit growth forever, although they think Amazon can. Apple doesn’t even appear to be trying all that hard. Apple’s fundamentals are spot on and I see nothing wrong with that. So, even if Apple doesn’t reach that difficult $1T market cap, that doesn’t make it a dying company because no company has come as close as Apple. I think all Apple would have to do is have one new hit product category and that could push them up to the $1T mark, but I’m sure that’s easier said than done.

    1. “Apple doesn’t even appear to be trying all that hard.”

      Perhaps that is part of Apple’s P/E ‘problem’. P/E measure in many ways is a measure of ‘future’ possibility based on information provided by the company concerning its future direction. No matter how high current earnings may be, if the ‘future’ is ill informed by announcements (or lack thereof) by a company, investors (and Wall St.) are most likely reluctant to perform actions that would increase the P/E.

    1. Amusing that when I viewed the article it ended with an ad link to “10 stocks we like better than Apple”.

      It seems to be a Motley Fool ad engine that inserts itself sometimes at the end of articles. Refreshing may show it if it doesn’t appear at first for you.

  2. Amazon will win this race. However the prize for the winner may be a poisoned chalice with calls for a break up citing the old monopoly chestnut. Fortunately Bezos is not a Jobs, if he had coined a deal with MS for using windows on Amazon phones, using Amazon’s price model. He would have severely damaged both Android and Apple.

    1. That is certainly possible but somewhat unlikely for the same reason it is hard to charge Google as a monopoly. It is too easy for consumers to choose a different provider. Whether that new provider is ‘better’ at the core business in question is another thing altogether.

      Amazon has been said to have 40% of all online purchases in the U.S. but only 3% of all retail in the U.S. (in contrast to WalMart’s 6.25%). It is more likely Amazon will double its growth or more before being charged with any monopoly practices. Outside the U.S. Amazon is far from being the largest online retailer meaning they have a lot more growth opportunities allowing stock price to rise.

      IMO if Amazon had gone the Microsoft route for their electronics they would have failed to piggyback on the existing Android owners. Being able to be compatible with Android gave them a good foot in the door to getting up to speed with the competition.

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