Amazon’s market cap is closing in on Apple

Would Steve Jobs have taken this sitting down?

A friend of the blog forwarded this Motley Fool link with these words:

You like charts. Here’s one full of them.

From Apple vs. Amazon: The Race to $1 Trillion Is Heating Up

The Motley Fool’s Evan Niu continues:

There is one notable similarity. Any time there is speculation of either company entering into a new market, shares of incumbents in those markets often tank, as investors fear competing with either company. However, Apple doesn’t enter new markets very often, usually one every few years, while Amazon continues to expand into numerous markets, leading to what’s now known as the “Amazon effect.”

The stark contrast in financials also means each company’s respective valuation metrics are also worlds apart. Apple is incredibly cheap by just about any valuation metric you can think of, trading at a substantial discount to the S&P 500. Amazon, on the other hand, looks astronomically expensive. However, you can partially justify Amazon’s premium valuation with much stronger revenue growth, even as Amazon’s top line still lags Apple’s.

My take: Nothing foolish about that.

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