Amazon’s stock surges; results in overshadowing Microsoft

Amazon Inc’s shares surged on Friday, February 2, pushing its stock market value above $700 billion and threatening to eclipse Microsoft Corp, a day after the online retailing behemoth reported blockbuster results.

Amazon’s stock was up 3.7 per cent at $1,441 per share in afternoon trade, on track for a record high close and putting its market capitalization at $701 billion. The stock traded as high as $1,498.

Microsoft fell 2.2 per cent to $92.97, trimming its market capitalization to about $711 billion.

Apple Inc, the world’s most valuable listed company, was worth $827 billion on Friday after reporting disappointing iPhone sales on Thursday. Its stock fell 3.7 per cent to $161.57.

At least 13 brokerages raised their price targets for Amazon after it posted record profits, pointing to growth potential from increasing global Prime subscriptions and a market-leading cloud business.

Analysts at Jefferies, Wedbush and Credit Suisse were the most bullish, boosting their targets to $1,750. At that price, Amazon would be worth about $850 billion.

Microsoft’s stock has jumped 150 per cent to new highs since Chief Executive Officer Satya Nadella took over in 2014 and made the company a major player in cloud computing while reducing its dependence on a tepid personal computer industry. But Microsoft has failed to keep up with Amazon shares, which have surged 73 per cent in the past 12 months.

Amazon revenue has been growing at a scorching pace as more shopping moves online and businesses shift their computing operations to the cloud, where Amazon Web Services (AWS) leads the market. AWS, which competes with Microsoft’s Azure and Alphabet Inc’s Google Cloud platform, reported a 45 percent jump in revenue to $5.1 billion in the quarter.