Amazon.com Inc. knocked Microsoft Corp. off the podium on Wednesday, to take over as the third-largest U.S. company by market capitalisation for the first time. Amazon’s stock surged 2.6 per cent to a record close of $1,451.05, lifting its market value by $17.69 billion to $702.46 billion. Meanwhile, Microsoft shares climbed 1.6 per cent to increase its market cap by $10.78 billion, but only to $699.22 billion. Amazon had briefly pushed past Microsoft in intraday trading on February 7, but relinquished its lead by the close of trading. Microsoft had a $29.17 billion lead on Amazon–$731.56 billion to $702.39 billion–on January 31, when Microsoft’s stock reached its record close. But Amazon’s stock has pulled back less than Microsoft’s, and bounced higher, since then.
Amazon has been busy since it reported better than expected quarterly earnings in early February, announcing that it will be working with J.P. Morgan Chase & Co. and Warren Buffett’s Berkshire Hathaway Inc. on improving employee health care. The company also said it would start offering free two hour delivery of Whole Foods groceries via its Prime Now service. Investors also appear excited about bigger projects that might be on the company’s horizon, following media reports that Amazon is interested in entering the hospital supply business, building its own shipping service, and designing an artificial intelligence chip to speed up the response time of its voice-controlled products.
Microsoft, meanwhile, reported better than expected fiscal second quarter profit and revenue after the January 31 close. Earlier this week, the company said it was joining forces with Chalkup, an education start-up. Amazon’s stock fell as much as 7.7 per cent from January 31 to February 9, and has rallied 8.3 per cent since then, to close fractionally higher on the month. Microsoft shares slumped as much as 10.5 per cent from January 31 to February 8, then bounced 6.8 per cent, to be down 4.4 per cent month to date. In comparison, the Dow Jones Industrial Average has shed 4.8 per cent this month, while the tech-heavy Nasdaq 100 Index has lost 4.0 per cent. Amazon is still well behind Google-parent Alphabet Inc. which currently sits in second place at $745.47 billion. First-place Apple Inc. has a big lead with a market cap of $849.24 billion.
Although Amazon made its move today, Jeff Bezos, Amazon’s founder, chief executive and largest shareholder, made his months ago, when he passed Microsoft founder Bill Gates to become the world’s richest man. Bezos is currently worth about $118 billion, while Gates is worth about $90.3 billion, according to the Bloomberg Billionaire Index. Jeff Bezos owned 78.9 million shares of Amazon, or 16.3 per cent of the shares outstanding, as of Dec.31, according to the latest filings with the Securities and Exchange Commission. With the stock up 24.1 per cent year to date, Bezos could be about $22.2 billion richer this year.
