SPENCER SOPER
Associated Press
The share price of Amazon.com Inc. topped $1,000 for the first time in Tuesday trading. It was a new milestone for a company wooing investors by dominating online commerce and cloud computing, two industries expected to keep growing as shopping habits change and businesses rethink how they deploy technology.
Amazon shares hit $1,001.20 in New York Tuesday, up about 40 percent from a year ago and more than double the 15 percent gain of the Standard & Poor’s 500 Index over 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 as Amazon is growing quickly in massive global industries that show no signs of slowing, said John Blackledge, an 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. That’s because shoppers continue to shift from stores to websites, according to EMarketer Inc.
Amazon is dominating e-commerce with its $99-a-year Amazon Prime subscription, which includes delivery discounts, music and video streaming and photo storage that keep shoppers engaged with the website.
The company had 80 million Prime subscribers in the U.S. as of March 31, an increase of 38 percent from a year earlier, according to Consumer Intelligence Research Partners. Prime memberships help lock in loyalty, which is critical as competitors such as Walmart enhance their e-commerce offerings to slow Amazon’s momentum.
Amazon’s rise has made Jeff Bezos, its founding chief executive officer the world’s second wealthiest person, second only to Bill Gates, co-founder of Microsoft Corp., according to the Bloomberg Billionaires Index. The rise of Bezos has earned him praise from fellow self-made billionaires Mark Cuban, owner of the Dallas Mavericks and judge on the television show “Shark Tank,” and Warren Buffett.
“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.”
