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Amazon Joins Apple in the $1 Trillion Club

Amazon ($AMZN) has joined Apple ($AAPL) in becoming a $1 trillion company by touching $2,050 on Tuesday, the 4th of September 2018. It was already foreseen that the online retail giant and movie streaming company would get there. It has been through an unstoppable momentum, and it really wasn’t that hard to get to the 13-digit level. It had already surpassed the $2000 mark on the 30th of August 2018. We’ve seen Amazon shares demolish the S&P 500’s 6.5% growth with an 80% year to date increase in the shares. Back in October 2009, Amazon had hit $100 per share. Now Apple and Amazon are the only publicly-traded companies to have touched $1 trillion.

The Year of Milestones for Amazon

This year has been full of milestones for Amazon. At the start of the year, Amazon had a value of $580 billion. We saw the company set apart billions each year from its profits for growing its business and improving its already strong retail business. The experimentation with drone delivery is an example. Its constant growth has put it on a path from reinventing retail to being a contributory factor to many brick-and-mortar retail powerhouses getting out of business.

And it’s worth realizing that Amazon’s tremendous growth has been coming despite its brick-and-mortar rivals also including Best Buy ($BBY) and Walmart ($WMT) that make up for around 90% of all the consumer retail expenditure. And if Amazon’s $1T evaluation needs to be balanced, you would need to pile up the market caps of the largest of the 14 retailers.

Investors Are Hungry for Amazon

Though the company has a significant market cap, Amazon’s investor appetite has been growing with the recent focus of the company on greater profitability. It has posted a Q2 income of $2.5 billion that compares to just $197 million in 2017’s second quarter. And investors have been in agreement with Amazon’s growth.

One of the factors contributing to this investor confidence is Amazon’s moves to diversify and secure its future. This has happened all through its existence, with its most recent example being its entry into the groceries market by acquiring Whole Foods. And the company has also expressed its desire for investing in pharmaceuticals, while Google ($GOOG, $GOOGL) and Facebook ($FB) need to be warned about competition from the retail giant in the digital ad space.

And the good news is that though Amazon’s price-to-earnings ratio stands at 180, while the figure for its brick-and-mortar rivals is just 40, it is still among the cheapest stocks out there.

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