Amazon is back into the trillion dollar market cap club, as its fifth member. The e-commerce giant had a commendable start to the new decade as it becomes the fourth U.S. company to reach a value of $1 trillion, a few days after Google parent Alphabet made its debut in the club. Amazon’s entry to the club is the outcome of crushing financial numbers, driven by a wave of new customers to its Prime service, thus defeating retail rivals in the crucial holiday season.
Amazon announced fourth-quarter financials after the market closed on Thursday, beating expectations for revenue and profit. This achievement is also the result of nearly half of 51 brokerages selling Amazon stock reaching their yearly target, which incremented by 9% to reach a valuation of $2,036 in early trading.
Amazon isn’t new to the trillion dollar club though. The company has been in and out of the elite list quite often. This time though, numbers suggest that Amazon is here to say. According to Reuters, Benchmark analysts said Amazon reminded the world of its “size and capacity advantage,” and raised his price target by $150 to $2,400.
Let’s talk about revenue gains that led to this day. Amazon saw a staggering 21% growth in net sales to reach $87.4 billion. These include a whopping 34% increase in revenue of AWS services, its data selling and cloud computing division, and a 32% increase in revenue from Prime subscriptions. According to Marketwatch reports, sales in Amazon’s “other” category, which includes advertising, grew by 41%. Forbes examined, that Amazon owns nearly half of the public cloud infrastructure market and is the de facto leader in the rapidly growing industry. Amazon’s investment in one-day shipping also appears to be paying off, notably during the holiday season, as indicated by Prime subscription gains.
After posting these numbers, an elated Bezos said, “Prime membership continues to get better for customers year after year. And customers are responding — more people joined Prime this quarter than ever before, and we now have over 150 million paid Prime members around the world.” What’s striking is that 150 million equates to a growth of 50% in users in just two years.
Analysts are predicting that Visa and Mastercard can be first Non-tech companies to join the list that now contains four U.S. tech companies – Apple, Alphabet(Google Parent) and Microsoft along with Saudi oil major, Aramco.