The shares of tech giant Amazon moved up almost a quarter of a percentage point to the much awaited valuation of $1,000 per share.
According to data presented by Barron’s, the company now accounts for nearly 9 per cent of all general merchandise sales in the U.S. except gas, cars, food and restourant services. And this superb percentage is growing.
The all-time high also pushed Amazon’s valuation to $477.3 billion in trading last week. But shortly after, Alphabet, Google’s parent company, caught them. Shares of Google and Amazon have been chasing each other recently. Amazon briefly breached $1,000 in the end of May, however, Alphabet shares have reached as high as $1000 a piece, only this week.
That is put Amazon and Alphabet in the same club as Priceline Group — the only other company on the S&P 500 to boast a quadruple digit stock price. Priceline shares were trading at about $1,857 as of last week.
According to Fortune, share price alone is not a great marker for the value of a company. In that field, Alphabet’s $682 billion market cap is a head above that of Amazon’s, and Priceline’s $91 billion, putting Alphabet much closer than Amazon in the race to $1 trillion.
While Amazon is widely recognized for having the top cloud marketshare, Cowen got feedback from cloud users about topics ranging from awareness of different brands to trends in IT spending and the migration of data workloads to the cloud.
“AWS ranked first or second in all facets of user experience,” Cowen analyst John Blackledge observed.
Amazon Web Services is worth $221 billion, in Blacklege’s model, or 17.5 times projected 2018 Ebitda. Amazon’s e-commerce and other businesses have a $301 billion valuation, or 1.63 times projected 2018 sales. The analyst expects AWS’s revenue and Ebitda to grow by 25% to 26% per year from now until 2022.
“In the past six months alone, countless enterprises have announced plans to migrate key components (or all) of their global IT infrastructure to AWS, including Live Nation, Dunkin’ Brands, Capital One, and HERE Technologies [backed by Intel, Audi, BMW and Daimler],” he wrote, in addition to a $1 billion sales contract with social media darling Snap.
AWS has also scored pacts with cloud software providers like Workday and Salesforce. Micrososft uses its Microsoft Office and other apps to lure customers to its cloud service.
“Azure was viewed as the platform that customers would most likely purchase or renew going forward” with 28% of respondents citing the service, Blackledge wrote. AWS scored 22%, while 15% selected Google Cloud Platform and 10% named IBM.
Google Cloud Platform came in third in almost every category that Cowen surveyed.
“Given the size of the market/opportunity and the resources and focus [Google] is putting behind GCP, we expect further traction over time,” Blackledge wrote, citing the progress that Google’s cloud boss Diane Greene has made since the company acquired her enterprise application development platform Bebop Technologies in November 2015. Greene is a co-founder and former CEO of VMW.
Google Cloud was among the market segments that Alphabet CFO Ruth Porat cited in a recent talk. Jim Cramer and the AAP team discussed Alphabet’s ability to “balance core investments with ones on moonshot opportunities for the long term,” in a recent report. Find out what they are telling their investment club members.
Oracle’s strength in databases could help to gain business, he added. For instance, AT&T agreed in early May to move thousands of databases to Oracle Cloud.
Over the past year, shares of Amazon have risen 40 per cent. It would have to keep up that same performance for another 615 years to reach the lofty valuation of Class A shares of Warren Buffett’s Berkshire Hathaway, now trading at $247,025 a piece. Granted, Berkshire Hathaway has never split its stock.
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