Among all the tech giants, Microsoft and Apple have crossed the US$2 trillion mark, and market analysts were only waiting for other companies to join the competition. Recently, the consumer discretionary giant Amazon.com revealed that its market value is soaring and that the company will soon be valued at US$2.1 trillion in less than 12 months. For the past few months, there have been several reports and news that the stock market heavyweights are on their journey to reach the US$2 trillion mark.
Amazon will make history. It is going to become one of the first companies outside of information technology to reach a valuation of US$2 trillion.
While Apple is gaining revenue from the sale of iPhones and MAC laptops and desktops, and its services unit, the wing that includes Apple Pay, Apple Music, and Apple Store, is also increasingly growing. Microsoft has generated a significant amount of revenue and profit from its Office 365 subscription suite of software. And lastly, Amazon is offering more products and services to its prime subscribers and other consumers who are stuck at home during the Covid-19 lockdown.
How will Amazon reach US$2 trillion?
To reach the US$2 trillion mark, Amazon's global market value must jump 15% from its current market capitalization, which is US$1.7 trillion. Analysts also predict that Amazon's stock price will jump nearly 33% in the next 12 months. The company is estimated to earn more than US$28 billion in the current fiscal year, which is approximately 32% more than compared to 2020.
Increased purchase over e-commerce platforms has accelerated the growth of the company. Amazon has innovated several new technologies and services to provide for its customers during this pandemic, which has acted as a catalyst to amplify the growth of the company.
What about the other companies?
Other companies like Alphabet and Facebook are also closing in on the US$2 trillion mark. In the first quarter of the year, Alphabet's revenue has shown an impressive jump of approximately 40%. Analysts predict that in the next 12 months, Alphabet will reach approximately US$1.88 trillion, showing an impressive jump in revenue of about 14.2%. Meanwhile, Facebook is also about to reach the US$2 trillion club.
Is it time for the companies to take a breather?
Analysts and stock market investors believe that the companies are running too fast and too far. Even though these companies have shown resistance to market fluctuations, the valuations are a concern for the long run.
Apple and Microsoft have risen over 30% in 2020. Even though the global economic market is still on the rebound after the disruption caused by the pandemic, these companies have been doing exceptionally well, considering the market condition. After the economy bounces back, these tech giants are supposed will perform even better.
But no matter what these analysts believe, the valuation for these companies is rising and will continue to rise in the future, making these the top companies dominating the entire market.