The milestone came Tuesday, with the e-commerce giant’s market cap (a metric derived by multiplying the number of shares outstanding by the share price) reaching $768 billion to overtake that of Google parent Alphabet. Last month, it surpassed Microsoft to become No. 3. Apple is currently No. 1, with a market cap of $885 billion.
In today’s trading session, the stock has been flat so far, at about $1,587, but Amazon appears to have a clearer path forward than many of its fellow behemoths at the moment. Google and Facebook, which dominate the digital advertising space, are facing new levels of scrutiny in light of revelations about Facebook’s deployment of user data. (Political data firm Cambridge Analytica, which was hired by the 2016 Donald Trump campaign, accessed data from more than 50 million Facebook users without their permission, it was revealed last weekend.)
Without that kind of existential fog to cut through, Amazon has continued to execute well. Its stock is up 80% over the past year (compared with 24% for Apple). Cloud computing is driving a lot of the bullish sentiment about the company. Its Amazon Web Services (AWS) division, which handles cloud-based projects for a range of clients, took in nearly $17.5 billion in revenue in 2017 and its operating profit represented 60% of the entire company’s.
Another area of dramatic upside, of course, is advertising — provided Amazon can steer clear of the uncertainty clouding the picture for other digital ad giants. “We think advertising could become Amazon’s most profitable revenue stream and similar to AWS afford opportunities to invest back into the core biz,” Jefferies analyst Brent Thill wrote in a research note last week. He sees Amazon hitting the magic $1 trillion level by 2022, though he raised his price target for the stock to $1,850 from $1,750.