Not one to be left out, online retail megalith Amazon is now worth $1 trillion total market value, crossing the threshold during early afternoon on September 4. Amazon has achieved the milestone just weeks following Apple’s $1 trillion valuation.
We’d say that this valuation has been a long time coming, but Amazon was worth just $580 billion in comparison as of early 2018, according to CNN (opens in new tab). Why the massive surge in valuation, then?
Up until this year Amazon was funneling much of its revenues into research and development for products and services as well as acquisitions, noted CNN. But, for around the past year, the company has simply been focused on tuning up profits through its cloud business known as Amazon Web Services, as well as the advertising and revenues from Prime membership subscriptions.
Explaining Amazon’s ascent
However, that doesn’t entirely explain why investors are so absolutely bullish on Amazon. As CNN opines, and we largely agree, it’s been Amazon’s consistent ability to carve out a place for itself in every industry it has attempted to invest in.
This has lately been achieved via acquisition, particularly in the cases of Whole Foods supermarkets in 2017 and smart security company Ring earlier this year. However, even more important to note is Amazon’s role as a data company.
Amazon has petabytes worth of data on its customers regardless of whether they’re subscribers to Amazon Prime (though, that helps immensely). If you’ve purchased something on Amazon or own one of its many Echo speakers or Fire tablets, then you’ve provided Amazon with data it has used in some capacity to improve its products and services – or better tailor its advertising – and therefore increase potential revenues and profits.
Let’s hope Amazon now takes this valuation and turns it into an even better product in the next few years.