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Amazon Hits $1 Trillion Market Value Milestone (reuters.com)

Posted by msmash on from the aggressive-expansion dept.

Amazon.com on Tuesday became the second U.S. company to reach $1 trillion in stock market value, just weeks after Apple hit the same milestone on Aug. 2. Shares in the world's largest online retailer last traded up 1.4 percent at $2,041.68. Its shares hit the $2050.2677 level to give its stock a value of $1 trillion. From a report: Amazon and Apple, which hit the trillion-dollar milestone on Aug. 2, symbolize the growing influence of tech companies on markets and the economy. The industry is amassing wealth and power, creating a new order in business where the most valuable resource is no longer oil, but data. Not far behind in market value are Google owner Alphabet Inc. and Microsoft Corp. , both approaching $900 billion, while Facebook -- which crossed $500 billion in July 2017, a day after Amazon -- has stalled at those levels amid a data-privacy scandal and growth concerns.

14 of 75 comments (clear)

  1. I see THREE SHELLS! by Thud457 · · Score: 2

    bah, nothing to worry about until they buy Taco Bell.

    --

    the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff

  2. Monopolies are evil by XXongo · · Score: 2, Insightful
    Monopolies are evil--even if they don't start out to be evil. The capitalism model only works with competition.

    Amazon is working hard to be a monopoly.

    1. Re:Monopolies are evil by jellomizer · · Score: 2

      Monopolies are wrong, but not necessarily evil. I haven't heard of many stories where Amazon is actively trying to kill its competition, they seem to just try to focus on making their product better.

      Amazon just seems to competing against multiple competitors just because they seem to play a long term game over they years while their competitors are trying to win for that quarter.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
  3. Monopoly is meaningless? by XXongo · · Score: 4, Insightful

    No. I buy nothing from Amazon. Whether they are worth a trillion dollars or they go out of business tomorrow, it is meaningless to me.

    When they drive the last of their competitors out of business, will it still be meaningless to you?

    1. Re: Monopoly is meaningless? by Anonymous Coward · · Score: 2, Insightful

      Perhaps, then, you don't mean nationalize? Breaking them up would leave room for competition. Nationalizing them would guarantee that no one could ever compete.

    2. Re:Monopoly is meaningless? by LynnwoodRooster · · Score: 2

      Amazon is dominant in e-commerce - but e-commerce is less than 10% of the entire retail market, so they need to increase by at least a factor of 20 to drive everyone else out of business.

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      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
    3. Re:Monopoly is meaningless? by LynnwoodRooster · · Score: 3, Informative

      For the most part, Amazon is much like a shopping mall chain - most of what they sell is FBA (Fulfilled By Amazon) for 3rd parties, and they take a warehouse/processing/shipping commission on it. Just like the mall owner gets rent (and often a piece of revenue in many places around the world).

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
  4. A tale of two P/Es.... by SuperKendall · · Score: 5, Interesting

    I find it amusing that with both companies being at a one trillion market cap, AAPL has a P/E ratio of 20, while AMZN has nearly an order of magnitude higher P/E at 185.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
    1. Re:A tale of two P/Es.... by Anonymous Coward · · Score: 3, Insightful

      For us readers of Benjamin Graham, today's stock valuations are just nuts. It's like the late 90s again. Folks justify the prices by saying they're paying for growth however; growth never lasts forever - there are always limits.

      Eventually, fundamentals win out in the end. And when they do, the people who ignored them for pie-in-the-sky predictions lose in the end. The years 1929, 1980, 1987, 1990-1991, 2000 and 2008 (and some others) illustrated that.

      I'm starting to see the articles with the theme of "it's different this time" like I saw in 1999.

    2. Re:A tale of two P/Es.... by DavenH · · Score: 2

      And if you traded just on P/E metrics alone, you'd underperform the market massively.

      What's the use of a low P/E? So the dividends will have a good yield without hurting cashflow, right?
      Well, what if dividends are taxed more than capital gains? What if the company can redirect that profit into capex so they grow faster than the market? In this case, investors like a company that can keep growing at maximum pace, so that when the saturation point comes (which may be a long time with Amazon - maybe they end up dominating all markets), the dividends will be far more rewarding.

    3. Re:A tale of two P/Es.... by jellomizer · · Score: 2

      Well I am not hearing economy 2.2 patch level 18. Amazon and Apple actually made their money by selling stuff for a profit. And not on speculation of future greatness, sure they make some money from speculation, but it is shown by solid sales numbers, and not fancy powerpoint demos.

      --
      If something is so important that you feel the need to post it on the internet... It probably isn't that important.
    4. Re:A tale of two P/Es.... by Anubis+IV · · Score: 2

      Actually, while you're correct that Amazon certainly does sell real stuff with real value for a real profit, their valuation has largely been based on speculation of future greatness.

      For years, they've had minimal profits because they've left money on the table in the interest of driving customer growth while spending what they did bring in on improvements to their infrastructure. Despite their minimal profits, people have kept investing in them on the continued promise that—at some point in the future—Amazon could flip the switch and start collecting those profits. It's my understanding that Amazon signaled their intent to finally flip the switch awhile back. They've eliminated enough of their competition and expanded into enough areas that they can slow down and rest on their laurels a bit.

      And, sure enough, we've recently started to hear significantly more stories of their prices being less competitive, fewer items being available for free two-day shipping, and the screws getting turned on more and more of their suppliers. They're leaving less profit on the table, but the stock market hasn't really caught up yet to that new reality. While there is more growth yet to happen, the market seems to value Amazon on the assumption that their growth will continue at its meteoric pace, despite Amazon signaling to the contrary.

  5. Re:The time to nationalize Amazon draws closer... by jellomizer · · Score: 2

    Ok, even if you have a good reason or not, I don't see how your post is relevant.
    Are you implying that somehow you are better person, because you didn't buy something from Amazon?
    If so you should give your reasons to explain why, vs. that you just don't.

    It is kinda stupid to make a statement where no one really knows what you mean.
    It is kinda like in college when some students make a silent protest. With no signs or anything else. It is just a bunch of people sitting quietly in the hallway.

    --
    If something is so important that you feel the need to post it on the internet... It probably isn't that important.
  6. Monopolies are inefficient by XXongo · · Score: 3, Interesting

    If capitalism is so great, why does it allow monopolies to exist?

    Capitalism doesn't really "allow" or "not allow" things. That would be a regulatory scheme.

    Capitalism (or more specifically, free markets) is a system that is efficient on the micro-level (for a certain definition of "efficient".) If the system evolves into a monopoly, however, the free market assumptions no longer hold, and the system is no longer efficient.

    It seems to me that monopolies are the result of executing your capitalistic business plan successfully. In the physics world, monopolies would represent a low entropy state.

    I don't even know what that means. In general, monopolies are a result of entry barriers and economy of scale (which may often be the same: the entry barrier is often because of the economies of scale.)

    Once a large corporation enter the scene, there is also an anticompetitive entry barrier: a larger corporation can simply underprice an upstart competitor, using the strategy that they can simply take a loss until their competition goes bankrupt, and once the competitors are all driven out of business, raise their prices to recoup their losses. Is this "executing a capitalistic business plan successfully"? Well, I suppose.