How Amazon has become the most valuable public company in the world

It is now up to Amazon to stand on top.

The 24 - year - old company outperformed Microsoft as the company with the largest market capitalization, reaching $ 796.8 billion. Microsoft, which surpassed Apple, took first place by a month ago, reaching a market value of $ 783.4 billion.

Last month, in September, Amazon reached $ 1 trillion, but due to the collapse in stocks at the end of 2018, the company scored one of its worst performance for a quarter of the year since 2008. However, the Amazon rally, which has lasted several days since the beginning of 2019, brought the company first.

There are several reasons why investors continue to have a bullish attitude for Amazon's shares, but mostly they are confronted with the different approaches to expansion and expansion. But five things are really excited by investors.

Cloud

While Microsoft's cloud is growing at a faster pace, Amazon's web services remain insurmountable. According to the Synergy Research Group, annual revenue from AWS exceeds $ 23 billion and occupies 40% of the public cloud market.

With millions of active users, AWS has more than 140 developer services, and business continues geographically to grow.

Dominant power in e-commerce

Amazon has grown as a company in various business lines over the years, but the core of the company remains e-commerce. Half of e-commerce sales in the US are through Amazon, and about 90% of the company's revenue comes from retail. There is also room for growth. Amazon accounts for only 5% of all online and offline retail sales in the United States. The company invests very seriously for development in other regions like India and successfully implements its merger with Whole Foods.

Growth engines such as health, Alexa and ads

One of the strong areas of profit for the company is advertising. Amazon's ad belongs to "other" business segments, which rose by 122% in the third quarter, crossing the $ 2.5 billion limit. More and more advertisers are redirected to Amazon.

The healthcare sector is another big segment that Amazon is targeting after purchasing the online pharmaceutical company PillPack last year for about $ 1 billion. Banking is a sphere in which Amazon can do more than last year that the company said it was working on a product that resembled a check account.

Hollywood is also under the radar of the company with the realization of Amazon Studios. The company shoots the original TV shows and series that Prime users can watch. The company does not always generate revenue when someone says "Hey Alexa," but Amazon can make more money through Alexa's development when more users use the assistant to buy different things. The service has recently integrated Microsoft's Cortana.

A cohesive leadership team

One of the key differences between Amazon and other technology giants is the narrow, cohesive and united leadership team. CEO Jeff Bezos has gathered a fierce and loyal group of top performers, some of whom have been in the company for years, if not for decades. Bezos's S-Team, as they call it, includes 20 artists and is known for its stability, which is part of the Amazon culture.

Less drama

Recently, Amazon has also faced a lot of difficulties, including Donald Trump's attacks, and making it difficult to find a second headquarters.

But none of these risks imply a direct threat to the company. They are completely in contrast to Apple's major issues in China, and confidential information scandals covered Facebook. That's why many see Amazon's shares much safer.

Source: CNBC

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