Thirty-three days after Apple crossed the $1 trillion milestone in market value, Amazon on Tuesday briefly became the second US company to cross that magic figure. While Apple took 38 years to enter the 13-digit exclusive zone, Amazon did it in just 21 years. Amazon is racing ahead and it may cross $2tn in market value by 2024, experts say. Now two more US companies, Microsoft and Google’s parent Alphabet Inc, are inching their way towards the $1trillion mark.
According to market experts, one factor for Amazon’s amazing success is investors’growing confidence in the company whose price-to-earnings ratio is four or five times higher than that of other firms. For several years, Amazon did not profit much as it was using most of the revenue earned to improve its core products, explore new technologies, acquire companies and diversify from online retail to cloud. Experts say Amazon’s revenue is growing at 30% and if this trend continues, the company may be worth $2tn by 2020. Amazon’s cloud business, Amazon Web Services (AWS), is expected to generate $25 billion in revenue over the next 12 months. Its sales jumped 49% in the latest quarter. Eyeing the $450 billion prescription drug market in the US, Amazon struck a $1 billion deal this June-end to buy online pharmacy start-up PillPack.