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Amazon Hits $1 Trillion Market Value Milestone (reuters.com) 75

Posted by msmash 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.
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Amazon Hits $1 Trillion Market Value Milestone More

Amazon Hits $1 Trillion Market Value Milestone

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  • Monopolies are evil (Score:3, Insightful)

    by XXongo ( 3986865 ) on Tuesday September 04, 2018 @11:10AM (#57251048) Homepage
    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.

    • 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.

    • The capitalism model only works with competition

      What model? Capitalism only talks about the control and profits and how it relates to public or private ownership. Capitalism places no requirements on the outcome of the market. I will raise you something more insightful: Capitalism with competition is an unstable state, with any bump pure capitalism will always tend to a monopoly.

      Amazon is working hard to be a monopoly.

      So is my local corner shop. That's how capitalism works. The thing that sets Amazon apart is that they are *succeeding* in becoming a monopoly.

  • A tale of two P/Es.... (Score:5, Interesting)

    by SuperKendall ( 25149 ) on Tuesday September 04, 2018 @11:15AM (#57251078)

    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.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      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'

      • 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.

        • 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 futur

    • Re: (Score:3)

      by DavenH ( 1065780 )
      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

      • All of what you say is true but...

        Can it really account for an order of magnitude difference?

        Both Apple and Amazon have lots of room for growth. At some point something will replace the cell phone, and Apple has all of the components and developers in place to move on that.

        I have shares in both companies. But Amazon's P/E seem unrealistically high to me even though I agree with what you say about the potential future market growth of Amazon.

        • The denominator in P/E can be zero or negative making it a silly way round to do the quotient imo. It also means that concerning yourself with the order of magnitude of P/E can be misleading.
    • Most likely it is because Apples market is saturated. There are only so many people on the planet that can afford iPhones.
    • They have high market cap for different reasons. Apple has high profit margins due to its brand name, so high it rakes in more profits than it knows how to reinvest and ends up sitting on a pile of cash, hence the lower P/E ratio. Amazon is more about selling everything it can to the point that people simply shop from there whatever they want through force of habit. This is a highly desirable position to be in, hence the high market cap.

      • But most people already buy most things from Amazon, so where is the growth coming from? Amazon I would argue has some room for growth but it seems like it is near saturation in terms of product sales and is desperately seeking out new markets (hence the push for things like Prime Video). Several websites already have figured out ways to pull me away from Amazon for purchases, why will that not become increasingly common?

        Apple meanwhile has more room for growth via several product lines that already exist a

        • Re: (Score:2)

          by jbengt ( 874751 )

          But most people already buy most things from Amazon . . .

          That is patently untrue.
          Still, Amazon has too high of a P/E ratio for my tastes.

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      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.

      Problem is, AAPL is dying! (Been dying for what, over 40 years now?). Of course, Amazon, having made very little profit, is going to take over the world. (If you look at their annual reports, making profit isn't actually a priority for Amazon - they intend to grow revenues even at the expense of profits.)

  • This needed to be split a long while back. $2K per share keeps out a lot of small investors. It's hard to buy a 100 share block at this price.

    • Then buy a single share. But still, I agree it would be better if the price was around, say, $40

    • $2K per share keeps out a lot of small investors. It's hard to buy a 100 share block at this price.

      I'm sure Amazon or the rest of the market is crying for the small investors.

    • Well I don't know about you, but it was under $18 when I bought it. I should have begged, borrowed and stole to buy a lot more of it then, too. It really did seem like a smart buy at the time, but I wouldn't have guessed I'd see 2800% growth. I'll take it. If it WERE to split, it would jump up quickly again, I suspect.

    • Re: (Score:1)

      by Anonymous Coward

      I think keeping out small investors is a feature and not a bug. They don't want their stock held by the kind of people who got burned on their house, then gold, then bitcoins.

    • Re: (Score:2)

      by dj245 ( 732906 )

      This needed to be split a long while back. $2K per share keeps out a lot of small investors. It's hard to buy a 100 share block at this price.

      Your broker doesn't allow you to buy fractional shares?

    • If you're too small an investor to afford a $2k share, then the broker commissions on buying shares are going to kill your percentage return anyway. Not to mention the enormous risk you expose yourself to investing in just one stock.

      At that level of investing, you're much better off investing in mutual funds - partial ownership of a big collection of stocks. Especially index funds. The price to buy into a fund is typically much lower (with a floor of a few hundred dollars). And the fact that they bun

  • Amazon sucessfully tests its first Hydrogen Bomb and builds an ICBM to launch it at Apple.

  • Data may in fact be more valuable than oil, but neither Apple nor Amazon demonstrate that idea. Apple claims it's not selling it's data at all (and it's investor reports seem to bear that out) and Amazon's growth is largely a matter of market position, not data.

  • I am not surprised by their market share. It is so damn convenient to shop with them.
    In the last 8 months, I have made a concerted effort to avoid buying anything physical from Amazon.
    I do use Amazon to search for different products of interest and to get an idea of the price.
    I then try to find it in a local store and if the price is reasonably close, I buy it local.

    I had a look around last year and noticed that a lot of stores seem to close and suddenly realized that I am part of the problem. So, I buy loc

  • You know what happened after the Roaring 20s, in 1929?
  • Apple pays half in taxes and Amazon pays half in taxes equals $1 Trillion Dollars and the rest of us don't pay taxes. Problem solved!

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