On Monday, Amazon stock hit a record high. They grew 7% and were trading at $1,917 per share in the premarket on Tuesday morning. The company now has a market cap of over $920 Billion, and analysts believe that it won’t be long before it joins Apple at the top of the stock market.
Apple (NASDAQ: AAPL) may have been the first U.S. company to hit $1 Trillion of market capitalization, but it probably won’t be alone for long. Amazon (NASDAQ: AMZN), the company that was originally tipped to beat Apple to the record figure, is climbing quickly as it expands its business and receives increasing confidence from investors.
Some analysts’ figures estimate that sales will grow by 32% total at the end of this year. Total sales revenue could exceed $265 Billion if the company maintains its current trajectory. If stock price hits its target, which is $2,100 per share, then Amazon will have a total market capitalization of $1.02 Trillion.
Apple is also expected to grow on the stock market, with the company’s shares approaching a target of $215.40. or a total market capitalization of $1.05 Trillion.
These numbers will be interesting for investors both new and experienced. It is nothing short of astounding that Apple can maintain the world’s largest market capitalization, while remaining a tightly focused company that generates most of its revenue from iPhone sales. Apple is seen by some as vulnerable, as a loss in the desirability of the Apple brand would be disastrous for sales.
Amazon, by comparison, is heavily diversified. The company generates revenue from its e-commerce model, as well as from its enterprise AWS cloud computing and storage platform. Amazon also produces devices like the Alexa personal assistant and Fire line of tablets and smart TV devices. Amazon’s business model is much more robust, which is one of the reasons why investors are flocking to the stock.
Does Amazon Have a Place in the Average Portfolio?
Amazon stock is not cheap, but it could provide exceptional long term value. With stock prices only expected to go up, any investor who wants the company in their portfolio should act quickly. Stock price has increased 92.95% in the last 12 months, and 62.14% in the year to date. This is despite trade tensions, international market worries, and other smaller factors that have caused high volatility in the market this year.
Amazon is a growth stock in every sense of the term, and the company’s core business is not slowing down. Any investor without the stock, and who can afford it, should look for a buying opportunity before the end of this year.
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