It honestly feels like there isn’t anything that Amazon can’t do. From books to retail, to hardware and most recently groceries – Amazon is becoming quite the enterprise and an extremely effective e-commerce solution. But soon, they might have another quality that they can brag about. No, it’s not another business line just yet. It shouldn’t surprise you, but it looks like Amazon is about to beat Apple to close in on a valuation of $1 trillion! This news is coming ahead of the company’s second-quarter earnings. While I’m not necessarily surprised, I am a bit shocked. That number is insane. With Apple, it feels tangible. Like you know what kind of products Apple has, so you can understand why they would make it to $1 trillion.
I’m not saying that you can’t see that with Amazon, but a large part of their business is their e-commerce platform, which seems a bit intangible from a valuation perspective. But maybe that’s just me? I’m not knocking Amazon with this one. This is an incredible accomplishment, but I guess when I think about Amazon, I don’t automatically jump to that kind of dollar figure.
100 investors were polled to determine who would make it to $1 trillion first. Currently, Amazon has a market cap of $888 billion, whereas Apple is sitting at $949 billion and Alphabet lags behind a bit but is still sitting at $870 billion. These are insane numbers, but like I said – 70% of those investors believe that Amazon is going to get to that milestone first.
Perhaps the big reason for this prediction is that Amazon shares were up 56% as of Tuesday, compared to only 14% gains for Apple, and 19% gains for Alphabet. Regardless, these are all good numbers. I mean, Apple seems to be lagging in terms of share value, but a 14% gain since the previous quarter is nothing to laugh at.
What is giving Amazon these big numbers? According to a report, Amazon originally founded its cloud computing business, as a bit of a side project. But that’s what seems to be giving them a lot of their earning success right now. Amazon Web Services, as the unit is known, stores data for Fortune 500 companies (as well as others), and brought in $1.4 billion in operating profit during the last quarter. In fact, Amazon boasted 40% of the public cloud market through March of 2018.
While Amazon isn’t exactly well known for their cloud services, this is a service that they offer, and clearly, they’re doing well. This kind of points to what I was saying before – some of Amazon’s services aren’t exactly tangible. Yes, they have their own hardware line, there’s no doubt how much pleasure I get from asking Alexa what the weather will be like tomorrow. But I guess outside of that, and their online retail store, it’s hard to think about what Amazon actually does.
The big question that many of us have is – what’s next for Amazon? I mean, they can literally buy or start any business they want. But what will it be? At this point, that remains to be seen, but I don’t think I’m the only one when I say I’m looking forward to seeing what’s in stock for Amazon next. (No pun intended.)