Should you buy a trillion-dollar stock? Any stock reaching that status had winning results and made millionaires. Winners keep winning. However, how high can a trillion-dollar stock go? At such high levels, can it double One of the best stocks to own is Amazon (NASDAQ: AMZN), one of a few trillion-dollar firms. The market cap is $1.8 trillion. Too late to buy?
Look ahead, not back. Companies with higher sales find it tougher to grow rapidly. Two companies might earn $100,000 per quarter. This was 100% higher than Company A's $50,000 last year. Only 1% increased from last year's $99,000 for Company B.
Only Walmart sells more in the U.S. than Amazon. It earned $575 billion in 2023, up 12%. Incredible. Walmart's fiscal 2024 revenues rose 6%. ExxonMobil and Apple, the next largest firms, reduced sales in 2023, while UnitedHealth Group increased sales by 15%.
Amazon has consistently posted double-digit growth, a remarkable given its size. Its "day one" mentality of constantly innovating—entering new businesses and rethinking old ones—has helped it do this. An upgraded logistics network and AI, including robotics, refine e-commerce, its original business.
Amazon's fourth-quarter same- or next-day fulfillment in the U.S. climbed 65% due to warehouse regionalization and new same-day facilities. Faster delivery increases customer satisfaction, Amazon reliance, and sales. Amazon's size makes incremental growth millions of dollars.
To expand selection and become customers' one-stop shop, it adds millions of products each quarter. Combining these elements generated a powerful firm that can maintain growing sales.
Additionally, these advancements are improving cost efficiency. Amazon delivers things faster and cheaper by keeping them regional because they travel fewer miles. The U.S. cost to serve per unit dropped $0.45 in the fourth quarter, while global costs fell for the first time since 2018.
Amazon's stock price is significantly associated with its operating income, the strongest indicator of profitability. Higher sales and lower costs boost operating income, margins, investor confidence, and stock price.
World is Amazon's oyster As for Amazon's other significant business, AWS leads the way. As the largest cloud computing company in the U.S., AWS takes 31% of the market.
This high-margin business generated considerable operating income. AWS is adding clients and increasing sales despite slowing rates. AWS should remain number one in a recovering economy as growth accelerates. Amazon is expanding into streaming, healthcare, and other industries. Any of them may be Amazon's next big thing.
Does Amazon stock rise? Amazon is the second-largest U.S. firm by sales but fourth-largest by market cap. It's hard to ignore the market cap and visualize it growing, but you should. Over the previous year, Amazon stock has gained 76%, nearly tripling from $1 trillion. It can rise if it keeps growing, releasing new items, and dominating its industry.
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