UPDATED with closing stock price. Amazon is on the verge of joining Apple as the only U.S. companies with a market capitalization of $1 trillion after an analyst boosted his price target for the Seattle tech giant.
In 2018 to date, shares in Amazon have gained 67% — for the past 12 months, they have risen 103%. Already in record territory, they gained another 3% today to close at $1,998.10, putting the company’s market capitalization just shy of $975 billion.
Morgan Stanley analyst Brian Nowak boosted his price target to $2,500 a share, up from his previous target of $1,800. The stock price began today’s session at $1,932.82.
Earlier this month, Apple became the first U.S. company to reach the $1 trillion level after a strong June quarter fueled by strong iPhone sales and other positive indicator.
Large-cap tech stocks have propelled stock markets to record highs in 2018, with the Nasdaq reaching the 8,000-point milestone and the Dow up more than 40%.
While everyone in Hollywood has its eye on Amazon’s Prime Video platform, that business unit is a flyspeck in the larger scheme of the company’s revenue. The company has recently focused more of its energy on disrupting the grocery and prescription drug sectors.
In Nowak’s “bull case” projections through 2022, the company will generate a 25% compound annual growth rate for subscription revenue, 33% for the Amazon Web Services cloud business, and 37% for “other” revenue. The “other” category is making many traditional media rivals nervous, as it includes advertising.
Amazon’s earnings in recent quarters have been stellar, exceeding analysts’ estimates.
Google parent company Alphabet and Microsoft are also in the $1 trillion conversation, with market caps in the range of $850 billion.
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