(Newswire.net — April 16, 2019) — Back in September 2018, Amazon, ever so briefly, became the world’s second trillion-dollar company. The shares had topped $2,000, valuing the company at over one trillion dollars, with the milestone coming just a few weeks after Apple Inc achieved the same feat.
The final quarter of 2018 saw a good chunk wiped off that valuation, but it has bounced back strongly in trading since Christmas, and, as of April 2019, Amazon looks like it is flirting with being a trillion dollar company once again.
It’s been an interesting year for the company, albeit one that saw its founder, Jeff Bezos, in the headlines in the mainstream media. Bezos became tabloid fodder over his high-profile divorce, but there was also the strange case of spying involving the Kingdom of Saudi Arabia.
Founder made the headlines recently
While Bezos’ personal life and personality does not move Amazon stock with as much force as, say, Elon Musk and Tesla, his standing and personality are nevertheless hugely important to the company’s fortunes. Take, for example, the seeming animosity between Bezos and US President, Donald Trump. Will that have any bearing on Amazon’s plans to expand into the healthcare market?
However, those interest in investing in Amazon and seeing that stock price further should be buoyed by the company’s continued logical, organic approach to growing the company through acquisitions. There is always a nice symmetry to the way Amazon expands, as if it is unfolding methodically to reach the next step.
We have seen in the last couple of years Amazon signalling it wants to be a big player in groceries, hoping to persuade shoppers to move to online. It’s been a stubbornly difficult task to persuade more people to shop online for groceries in the US, with just 3% estimated to be doing so. That low figure hasn’t stopped Amazon making a success of things, with Whole Foods sales up in 2018 a year after it was acquired by Amazon.
As Whole Sales CEO John Mackey said, “It’s been an incredible year. Our increase in sales has been far greater than I anticipated, and it’s continuing.”
Still huge room for growth in online groceries
Indeed, there are many reasons for Amazon investors to be optimistic about how it can grow in the groceries market. Consider that 41% of new Whole Foods customers in 2018 were said to be Amazon Prime members, drawn in by the exclusive deals on offer at the stores. Moreover, with the percentage of online grocery sales more than double in the UK and Japan (both 7.5%) than what they are in the US (figures from Deutsche Bank Securities), there is certainly evidence that the 3% figure is malleable.
The bottom line is that there is still enough evidence that Amazon has not nearing towards any celling in terms of its profitability. The groceries market is just one example of a sector where Amazon has huge potential, but it’s certainly not the only area. For those wishing to invest, and see those stocks rise to value the company beyond one trillion, there are certainly reasons to be optimistic.