Alex Wong, Getty Images
By various measures, Amazon CEO Jeff Bezos is the second- or third-richest person in the world. Not bad for a tech guy who wanted to sell textbooks online.

1K: Amazon Shares Hit $1,000, Show Off Cloud Dominance

May 30, 2017
Mark Cuban: “Amazon is worth far more than $1,000 a share. Consumers always want things at lower prices delivered faster. Amazon uses data better than anyone to achieve those goals for everything it sells. They have a chance to be the most dominant company in the world.” Inc.’s shares topped $1,000 for the first time Tuesday, marking a new milestone for a company wooing investors by dominating online commerce and cloud computing.

Amazon shares hit $1,001.20 in New York this morning, up about 40% from a year ago and more than double the 15% gain of the S&P 500 Index in the same period. Investors are thinking about how much further Amazon can grow as it tries to replicate its U.S. success abroad.

The shares will likely push even higher since Amazon is growing so quickly in massive global industries that show no signs of slowing, as shopping habits change and businesses rethink how they deploy technology, said John Blackledge, analyst at Cowen and Company LLC, who recently upped his Amazon price target to $1,125 a share.

“There’s a long runway there,” he said. “The markets Amazon is playing in with global retail and cloud computing are just massive. Things continue to go well and investors are looking for more upside.”

The Seattle company’s $478 billion market value is double that of Wal-Mart Stores Inc. even though the world’s biggest retailer will have sales three times larger than Amazon’s this year. Investors put more value in Amazon’s web traffic and delivery network than they do in Wal-Mart’s vast store presence because online spending will grow more than four times faster than overall retail spending this year as shoppers continue to shift from stores to websites, according to EMarketer Inc.

The world’s largest online retailer is dominating e-commerce with its $99 Amazon Prime annual subscription, which includes delivery discounts, music and video streaming and photo storage that keep shoppers engaged with the website. Amazon had 80 million Prime subscribers in the U.S. as of March 31, an increase of 38% from a year earlier, according to Consumer Intelligence Research Partners. Prime memberships help lock in loyalty, which is critical as competitors such as Wal-Mart enhance their e-commerce offerings to slow Amazon’s momentum.

Amazon has been tackling retail one category at a time, disrupting bookstores and electronics stores first and more recently pushing into apparel and groceries. Its rise has coincided with the decline of prominent retail chains such as Macy’s Inc. and Sears Holdings Corp., which have shuttered stores and laid off workers in response to declining sales. Shopping malls have resorted to hosting concerts and carnivals in empty parking lots to keep customers coming.

Another Amazon advantage is its profitable and fast-growing cloud-computing division Amazon Web Services, which maintains a global network of data centers and rents out storage space and computing functions to clients in a variety of industries, including Netflix Inc. and Airbnb Inc. as well as Capital One Financial Corp. and the federal government. Yelp runs many of its functions on AWS. This year, companies around the world will funnel $246.8 billion to Amazon and other cloud services providers, according to Gartner, up 18% from 2016.

Amazon’s rise has made its founding CEO Jeff Bezos the world’s second wealthiest person, behind only Microsoft Corp. co-founder Bill Gates, according to the Bloomberg Billionaires Index. His ascendancy has won praise from fellow self-made billionaires Warren Buffett and Mark Cuban, owner of the Dallas Mavericks and a judge on the television show “Shark Tank.”

“Amazon is worth far more than $1,000 a share,” said Cuban, an Amazon investor. “Consumers always want things at lower prices delivered faster. Amazon uses data better than anyone to achieve those goals for everything it sells. They have a chance to be the most dominant company in the world.”

By Spencer Soper

Popular Sponsored Recommendations

Electric Vehicles Spark New Opportunities in the Automotive Industry

Dec. 4, 2023
Automakers have increased plans to produce Electric Vehicles to meet customer demand for low emissions. With this radical shift, new opportunities and challenges for the auto ...

Digitally Transforming Data and Processes With Product Lifecycle Management

Oct. 29, 2023
Manufacturers face increasing challenges in product development as they strive to consistently deliver improved results. Discover how industry leaders are improving time-to-market...

How Manufacturers Can Optimize Operations with Weather Intelligence

Nov. 2, 2023
The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

Modern Edge Computing Accelerates Smart Manufacturing Initiatives for Discrete Manufacturers

Oct. 22, 2023
Discover how Edge Computing platforms are a requisite for discrete manufacturers to solve production challenges, accelerate digitalization, and establish a reliable infrastructure...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!