Hold the iPhone! Amazon primed to be larger than Apple

REUTERS
Friday, Mar 09, 2018
Photo: AFP

SAN FRANCISCO - Apple Inc, the world's most valuable publicly listed company, is in danger of being beaten by Amazon.com Inc to the $1 trillion mark.

Wall Street's optimism about last year's 10th anniversary iPhone had propelled Apple's stock 24 per cent higher over the past 12 months, giving it a market capitalisation of $893 billion.

That is $141 billion more than the $752 billion market value of Amazon, the world's third most valuable publicly listed company, but Amazon has been quickly closing the gap.

Amazon's stock has surged 83 per cent over the past year, bolstered by scorchingly fast revenue growth as more shopping moves online and businesses shift their computing operations to the cloud, where Amazon Web Services leads the market.

In January, Amazon announced that it, Berkshire Hathaway Inc and JPMorgan Chase & Co would form a company to cut health care costs for their employees, which was widely seen as a threat to the existing US healthcare system and underscored Amazon's ability to disrupt markets.

Amazon dislodged Microsoft Corp as the No. 3 US company by market capitalisation in February.

At $783 billion, Alphabet Inc has the second largest market capitalisation. The Google parent company's stock has grown about 33 per cent over the past year, faster than Apple but far slower than Amazon.

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Meanwhile, optimism about Apple's iPhone X has given way to concerns that demand for the $1,000 device may be weaker than expected.

To be sure, past stock gains are not a reliable predictor of future performance, and the surge in Amazon shares in recent years has been exceptional by most standards.

But if Amazon's stock were to keep growing on the trajectory seen over the past year, the company's market capitalisation would hit $1 trillion in late August. Apple would reach $1 trillion around a week later if its stock price continued to rise at the same pace seen over the past year.

Alphabet would not reach $1 trillion until 2019 if its stock price continued to rise at the same pace seen over the past year.

Most Wall Street analysts are not quite that enthusiastic about the growth of Apple and Amazon. Analysts on average expect Apple's stock price to rise 11 per cent and reach $195 within the next 12 months, which would put its market capitalisation at $989 billion, according to Thomson Reuters data.

Analysts covering Amazon on average expect its stock to rise 10 per cent within the next year to reach $1,700, which would give it a market value of $823 billion.

Apple on Thursday was up 0.60 per cent at $176.05, while Amazon rose 0.31 per cent to $1,549.90.

Source : Reuters, AFP

Amazon.com Inc opened a rainforest-like office space in Seattle that it hopes will spark new ideas for employees.

Company office towers and high-end eateries have taken the place of warehouses and parking lots in Seattle's South Lake Union district.

The Spheres complex, officially open to workers, is the pinnacle of a decade of development here.

The Spheres' three glass domes house some 40,000 plants of 400 species.

Amazon, famous for its demanding work culture, hopes the Spheres' lush environs will let employees reflect and have chance encounters, spawning new products or plans.

The space is more like a greenhouse than a typical office.

Instead of enclosed conference rooms or desks, there are walkways and unconventional meeting spaces with chairs.

Jeff Bezos, Amazon's billionaire founder, officially opened the project in a ceremony with Amazon executives, elected officials and members of the media - by voice command.

"Alexa, open the Spheres," Bezos said, as a circle in the Spheres' ceiling turned blue just like Amazon's speech-controlled devices, whose voice assistant is named Alexa.

"We wanted to create something really special, something iconic for our campus and for the city of Seattle," John Schoettler, Amazon's vice president of global real estate and facilities, said.

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