When Apple, Inc. AAPL hit its $1 trillion market cap last month, analysts and investors anticipated and inferred about the next company to hit this huge milestone.
What Happened
On Tuesday, Amazon.com Inc. AMZN became the second publicly traded U.S. company to reach $1 trillion. During early morning trading, the stock rose nearly 2 percent to $2,050.50 to push the threshold by a mere 23 cents.
Why It’s Important
Amazon stock has increased roughly 70 percent year-to-date, driven by the increased success of the electronic commerce giant.
2018 Prime Day was its largest shopping event of all time, with over 100 million products sold in the 36-hour timeframe. Despite website errors during the event, Prime Day 2018 managed to surpass Cyber Monday, Black Friday and 2017’s Prime Day, with a reported $1 billion in sales of small and medium sized vendors. Following the immense success of Prime Day, Amazon reached $900 billion by late July.
Mark Mahaney of RBC Capital Markets expressed his optimism.
"Fundamentally, this is probably the single best story across the internet sector because of its strength in retail and cloud computing, now in advertising and the potential for this platform to tap into new areas,” Mahaney told CNBC.
What’s Next
Gene Munster of Loup Ventures commented on whether or not Amazon is overvalued.
"It depends on when your time horizon is. If you take a 3-5 year approach, I don’t think it’s overvalued, but if you take a one year approach, I think it is overvalued. Again, it’s all about the timing of it. In other words, I think the risk/reward here is more favorable in some other names, despite all the great things that Amazon is doing," Munster told CNBC.
Despite its value, Munster also remains optimistic.
"It's the reason we’re at this $1 trillion point, the fact that they have given investors confidence that they can disrupt markets, just like they have done in retail. I’m still a believer."
Amazon is expected to report earnings on Oct. 25, its first report following the market cap.
Shares were up 1.4 percent at $2,041.12 at time of publication.
Related Links
This Technical Analyst Expects Amazon's Stock To Make A U-Turn
Morgan Stanley Lifts Amazon's Price Target To $2,500, Bullish On Waymo's Prospects For Alphabet
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
