Last Thursday, Amazon, the e-commerce behemoth, has broken past the $2,000 (£1,538) per share mark. This milestone puts the online retailer well on its way to achieving a $1 trillion market valuation.
The shares in Amazon were at an all-time high of $2,010 just an hour after the markets opened in the United States of America. It boosted the company past the $980 billion market capitalisation milestone.
Last July, Amazon was able to make its way past the $900 billion cap marker. It indicated that the e-commerce company continued to be on a meteoric growth track to become the second publicly-traded company that is based in the United States that has been able to reach a $1 trillion valuation after Apple.
I in the past year, the share price of Amazon has more than doubled. It has nearly tripled since 2015.
In the most recent quarterly results of the company, Amazon doubled the consensus estimates on profits to report an enormous increase of 1,157.5 percent year-on-year in earnings per share.
To enter the trillion dollar club, the shares of Amazon will need to reach $2,050.
The spike observed last Thursday was largely influenced by a 3.2 percent share increase last Wednesday after some Morgan Stanley analysts issued a bullish note on the said stock and raised their 12-month target price to $2,500.
Russ Mould, an investment director at AJ Bell, said that the recent troubles experienced at fellow tech stock favourites such as Netflix and Tesla may be persuading the investors to “defect” to Amazon in an attempt to benefit from the success of the sector.
However, Mould warned that “any earnings disappointment could still leave the monster valuation exposed on the downside, and investors may still have to ponder whether it really makes sense to afford the firm a market cap that is the equivalent of 4.5 per cent of US GDP all on its own.”