Amazon hits a trillion-dollar valuation

Emily Nicolle
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Amazon was briefly worth $1,000,000,000,000
Amazon was briefly worth $1,000,000,000,000 (Source: Amazon)

Amazon has become the second ever US publicly-listed company to hit a $1 trillion market valuation.

Amazon shares briefly passed over the $2,050.27 mark needed to break the milestone earlier this afternoon, before dropping back down to $2,035.56.

It crossed the $2,000 per share threshold last Thursday, amid doubts from Wall Street that placed it as the most shorted stock on the market ahead of Tesla.

Read more: Amazon poised for trillion-dollar valuation despite stock shorts

Tech giant Apple hit the $1 trillion marker last month, after a steady share price rise took the 1976 Cupertino company to the top. Amazon meanwhile, which was founded in 1994, has had a much faster route to the coveted market cap.

Should it continue at its current pace, Reuters analysts suggest it will be a matter of when, not if, Amazon's market valuation will surpass Apple's.

Amazon's share price has more than doubled over the last year, adding more than $520bn to its market value. For comparison, Facebook's market cap stands at $494bn.

Google's parent firm Alphabet is set to be the next of the so-called FAANG group to challenge for a trillion-dollar valuation, currently sitting at $839.3bn.

Quilter Cheviot analyst Ben Barringer said Amazon's growth is far from over, as despite being well-established in the UK and US, it has "huge scope to grow in the rest of Europe and Asia, especially India".

Read more: Amazon doubles down on profits, but misses estimates on revenue

Amazon's profits in the last quarter smashed analyst expectations, providing investors with an earnings per share increase of 1,157.5 per cent year-on-year.

Revenue for Amazon Web Services, its cloud computing business which takes the largest market share globally above rivals like Google and Microsoft, soared 49 per cent to $6.11bn to beat estimates of $6bn.

Today's news takes founder Jeff Bezos' approximate 16 per cent stake in Amazon to a whopping $160bn.

The e-commerce giant went public in 1997 on the New York Stock Exchange for just $54m, with a valuation of $435m. Since then, it has become one of the world's most popular retailers, topping the charts year after year for consumer satisfaction.

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It has also been the subject of political scrutiny and controversy, including from the likes of US President Donald Trump who accused the firm of resting on the US taxpayer for its postal services.

In the UK Amazon has also faced criticism for its dominance as physical high street retailers continue to struggle. Chancellor Philip Hammond recently suggested he was considering a special tax against e-commerce sites that prevent younger stores from growing.

Barringer said despite these troubles, investors remain long-term believers in Amazon's ability to grow. With a proven ability to expand into new markets and rise to the challenge of technological innovation, analysts "continue to be confident in their positions" for its future success.