Following hot on the heels of Apple, Amazon broke through the $1 trillion market value mark on Tuesday, reports the Wall Street Journal. The popular online retailer became the second U.S. company to hit the mark after Apple hit $1 trillion last month.
The moment happened through midday trading, with Amazon’s share price topping $2,050.27, which was the magic number needed to get the company past $1 trillion, up 1.9 percent on the day. Such an increased price reflects the impressive year that Amazon has had, with the price increasing by 75 percent this year, equating to adding $435 billion, effectively adding the entire value of Walmart Inc. to the company.
Following the buying of Whole Foods last year, Amazon’s stock has been steadily rising as the company has recorded record profits. Those profits largely come on the back of Amazon’s cloud computing and Amazon Web Services, which made $17 billion last year, outstripping the spending on sectors like healthcare.
“They’re spending a lot on all these things to build and enforce their competitive advantages,” said Baron Capital manager Michael Lippert to the Wall Street Journal.
Amazon’s rise has happened quickly, growing from $600 billion in January to hit the mark, making over $400 billion in just 165 trading days. That saw Amazon beat Google parent company Alphabet to the mark and was much quicker than Apple’s run which took 183 trading days to add $100 billion, which suggests Amazon is poised to become the most valuable company in the world.
With now two companies hitting the $1 trillion mark, the race will be on to be the third company to hit the mark, unsurprisingly the two most likely to hit the mark next will be tech companies with Alphabet Inc. and Microsoft both getting close to $900 billion. Facebook doesn’t appear to be hitting that mark any time soon, with its profits stalling at $500 billion in July 2017, just one day after Amazon hit that mark.
Having both $1 trillion companies in the same industry sector could cause concern for investors, with Amazon, Apple, and Microsoft making up over 35 percent of the S&P 500’s total return, reported the Wall Street Journal.
It’s been quite a year for Amazon’s CEO Jeff Bezos who overtook Microsoft’s Bill Gates for the title of world’s richest man, according to Time, with his Blue Origin spaceflight company also growing alongside Space X.
Amazon’s rise has been impressive, with the initial stock offering less than $500 million in 1997, meaning an investment of $1,000 21 years ago would now have turned an individual into a millionaire.