Amazon to become the first trillion dollar company?

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It seems Amazon is poised to become the first ever trillion dollar company given the current market state. Apple is also another favorite to reach the trillion dollar mark, however, analysts believe that the acquisition of Whole Foods will give Amazon the advantage going forward as they look to expand even further.

Before the talk of the town was Apple as it’s the US’ most valuable company. Apple also has a strong and loyal customer base and its latest phones have been doing quite well. Thus all signs would point towards Apple winning the race to be the first company to reach a $1 trillion market cap. However, Amazon has been expanding at an alarming rate and it recently broke into the grocery market through acquiring Whole Foods.

At the moment, Amazon’s current market cap is $738.5 billion with its shares costing $1525 (up by 13%) at the time of this writing.  The US-based e-commerce giant has seen its stocks rapidly increasing in value in the past few days. Only 5 days ago, Amazon’s shares were worth below $1500.

Although Amazon has still a lot of ground to cover before it catches up to Apple who’s currently sitting at a market cap of $914 billion, many analysts still believe that Amazon can pull it off. If Amazon’s current surging prices are to be considered, then it is very likely Amazon will reach 1 trillion before Apple. According to GBH Insights analyst Dan Ives, Amazon is expected to grow all the way up to a share price of more than $1800 and he expects further growth in the future as well.

“The Prime membership moat that [CEO Jeff] Bezos & Co. have built is gaining further steam in the field, and the Amazon ‘flywheel effect’ is further playing out globally among consumers,” Ives said in a note seen by CNBC. “The Bezos strategic path, both on the consumer and enterprise fronts, [is] still in the middle innings of playing out and Amazon remains a ‘green light’ name to own at these levels.”

Amazon has been looking to expand for quite some time and it recently did so by acquiring Whole Foods, a grocery retailer. Amazon has also been working on its Prime membership and recently extended Visa rewards to Whole Foods users too. Not only that but it has also slashed a lot of prices ever since acquiring the supermarket. Thus, Amazon is working towards giving its customers better incentives to buy groceries from their own shops rather than other places. Soon, a lot of what we purchase might be coming from Amazon.


This may very well be true because it has been reported that Amazon will continue to search for more avenues to explore and will look to expand further. It is likely that Amazon will extend its visa rewards to whatever comes under Amazon’s bubble, therefore, it’s easy to see Amazon’s stock to surge and reach $1 trillion before any other company.

The reason Amazon might make it to $1 trillion instead of Apple who is much closer is due to a number of reasons. Apple may be the biggest company in the US due to its value, but Amazon is perhaps the company with the most amount of transactions and purchases per day. Even Apple products can be found on Amazon, thus prime members can use their 5 % cash back incentive to just use Amazon for their purchases instead of Apple. Thus, it makes for a better investment choice to invest in Amazon rather than Apple.

Moreover, Apple’s iPhone X, although received well, hasn’t done as well as Apple hoped it would. Their latest flagship phone hasn’t triggered that massive surge in stock that Amazon has going for them right now. Thus their growth would be slow at best.

Thus, all signs point toward Amazon getting to $1 trillion market cap first. Of course, there are other factors involved as well including a fast-growing stock market and a high inflation rate. However, Amazon cannot be discredited for the amount of work they have put into coming this far.

 

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