The e-commerce giant briefly became the second publicly traded company after Apple to hit the magic US$1 trillion milestone.
Shares in Amazon rose to a new high of US$2,050.50 in trading on 4 August. By the end of the day’s trading, the share price had receded to US$2,039.51, giving the company a market value of around US$995 billion.
The company’s share price has doubled in just a year. While the first company to reach the trillion dollar milestone, Apple, took 38 years to get there, it took Amazon just 21 years.
Its surging growth can be partly attributed to the success of its cloud computing platform Amazon Web Services, which grew nearly 50% in the second quarter. The retailer also had its biggest Prime Day yet this year and Bezos has revealed that the Prime program has more than 100 million members internationally.
— Breaking News (@BreakingNews) September 4, 2018
“Amazon did really well in online retail, but then the stock gapped up when they showed that they could become successful in cloud,” RBC Capital Markets analyst Mark Mahaney told CNBC. “It’s almost like the ticker changed from AMZN to AWS.”
The company has diversified in recent years, acquiring grocer Whole Foods Markets in 2017 and becoming a major player in online advertising. It is also continuing to invest heavily in Amazon Go, its unmanned retail branch and is developing proprietary technology for food delivery drones.
Amazon CEO Jeff Bezos gained around US$2 billion from the price rise, bringing his wealth to more than US$160 billion.
— Forbes (@Forbes) September 4, 2018
Bernie Sanders has been critical of Amazon
Vermont Senator Bernie Sanders has been a vocal critic of Bezos’ skyrocketing wealth and took to Twitter in the wake of Amazon hitting the trillion dollar mark.
“Thousands of Amazon workers have to rely on food stamps, Medicaid and public housing to survive. That is what a rigged economy looks like,” Sanders wrote.
Sanders is introducing a bill aimed at ending subsidies for low-wage employers. The bill proposes a 100% tax for large companies on the amount of federal benefits its low paid workers receive.
UK opposition leader Jeremy Corbyn also asked on Twitter why Amazon paid £2.8 million less in tax in the UK this year given its increased profitability and soaring market cap.
Amazon is worth $1 TRILLION.
Jeff Bezos is worth $155 BILLION.
Thousands of Amazon workers have to rely on food stamps, Medicaid and public housing to survive.
That is what a rigged economy looks like. Tomorrow we will introduce a bill to end subsidies for low-wage employers. https://t.co/jYQrtYbwZL
— Bernie Sanders (@SenSanders) September 4, 2018
The increase in Amazon’s worth over the past seven days of trading is larger than the entire market value of more than 80% of the S&P 500 companies and is around the same size as Starbucks. It has an incredible 49% share of the US e-commerce market.
Amazon’s profits have always lagged far behind its market value and the profits of the other trillion-dollar company, Apple. It is improving in this regard, however, reporting a US$2.5 billion profit for the quarter ending in June. It had a profit of US$197 million in the same quarter the previous year.