Amazon.com Inc yesterday joined Apple Inc in the $1 trillion club, becoming the second member of the group after its stock price doubled in 15 months – reflecting the online retailer’s striking transformation from a profitless bookseller into a disruptive force of commerce.
It is understood that the company’s shares rose as high as $2,050.50 on Tuesday morning, pushing it over $1 trillion in value, before immediately falling back and then ending the day at $2,039.51, below the $1 trillion threshold.
Investors have rewarded the Seattle-based company as it demonstrated better financial discipline in recent quarters, reporting record profits because of lucrative businesses such as cloud computing despite aggressively spending on industries from health care to grocery delivery.
“They’ve proven they can make it work,” said Michael Lippert, who manages the Baron Capital BCAP -98.00% Opportunity Fund that counts Amazon as its largest holding. “They’re spending a lot on all these things to build and enforce their competitive advantages.”
Amazon and Apple, which hit the trillion-dollar milestone on August 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.
While it took Apple almost 38 years as a public company to achieve the trillion dollar milestone, Amazon got there in 21 years. While Apple’s iPhone and other devices remain popular and its revenues are growing, it is not keeping up with Amazon’s blistering sales growth.