Amazon Joins The Elite Club Of Tech Stocks
Since the start of the year, the e-commerce and cloud giant has won over 60% on the stocks. Amazon has just joined Apple and Microsoft in tech stocks worth more than $ 1.5 trillion on the stock market. Since the beginning of the year, the title of the American giant has soared by more than 65%.
The Amazon business model’s appeal lies in customer purchases from books through DVDs to air fresheners and dog food. By paying attention to customers, Amazon employees apply a singular monetization method that ranges from consumables to gaming and e-books. The key to its success is the consistency of service that reduces transaction costs and helps sell more products.
The tremendous rebound in technological values has propelled sales figures to stratospheric levels. Amazon has the highest value: more than 160 times its anticipated profits for 2020 ($ 9.7 billion) according to Factset estimates against 30 to 36 times for Apple and Microsoft.
However, for some specialists, the global fall in consumption and the increasing competition in certain segments, notably in video streaming and in the cloud, pose a threat to these companies’ results.
The GAFAM Domination on Wall Street
Apple and Microsoft have also climbed to historical highs: the two groups were worth $ 1620 billion and $ 1597 billion, respectively, last Monday at the close. They are just a stone’s throw from the largest market capitalization on the planet, Saudi Aramco, whose value exceeds $ 1,750 billion.
The GAFAM have further strengthened their domination on Wall Street with the health crisis. Google, Apple, Facebook, Amazon stocks are now worth more than $ 6,400 billion, or 3.5 times the ACC. These five tech giants now weigh more than half of the Nasdaq 100, the index of the top 100 American technology companies, and almost a quarter of the standard Standard & Poor’s 500 indexes. At the height of the health crisis, their capitalization fell to less than 4000 billion dollars.
The recovery was then spectacular. Over 3 billion people have been confined worldwide. Naturally, they surfed the Internet, did their shopping online, and worked remotely. High-tech giants are on the front line to meet these needs.
In the still very tense market climate, investors favor growth and quality stocks, groups with little debt, and a comfortable cash position—a universe in which the American giants of the coast figure prominently.
According to Kate Huberty, Morgan Stanley’s analyst, Apple took advantage of the “stay-at-home” situation, with more customers staying at home and downloading their apps. Based in part on strong trends in the App Store, Huberty raised her 2021 services revenue forecast was to $63.7 billion, representing 17.8% growth. Apple closed at $373.85 on Monday with a $1.62 trillion valuation.
Microsoft announced growing demand for its communication and collaboration suites, and it’s rapidly launching specialized cloud software for fast-growing sectors like virtual healthcare to corner potentially lucrative markets. Last Monday, Microsoft closed at $210.70 per share and at a $1.6 trillion market cap.