The US stock market welcomed its second trillion-dollar company yesterday, as Amazon broke through the valuation barrier that only Apple has crossed before.
Just before midday in New York, Amazon’s shares edged up to trade above $2050.27 apiece – taking the company into the realms of the true tech giants.
Though Apple was the first to reach a $1 trillion valuation in August this year, analyst Ben Barringer at investment firm Quilter Cheviot said that, unlike the iPhone creator, Amazon still ‘has room to grow’.
Its retail side, the most well-known part of the business, ‘has huge scope to grow in the rest of Europe and Asia, especially India’, he said.
Just before midday in New York, Amazon’s shares edged up to trade above $2050.27 apiece – taking the company into the realms of the true tech giants. Pictured is founder Jeff Bezos
Meanwhile its other branch, Amazon Web Services, is the ‘undisputed leader’ in putting IT systems on the cloud, which allows businesses to store data and run software over the internet rather than having to pay for expensive in-house staff and hardware.
Barringer said: ‘We expect Amazon to continue doing well going forward, with the company having a proven ability to expand into new markets. While the share price has doubled over the past year, we are long-term believers in the case for the company.’
Jeff Bezos, the company’s founder, still owns more than 16 per cent of Amazon. No doubt the multi-billionaire will have raised a glass to his own success.
Amazon’s celebration followed a slower day for the UK’s biggest companies, as the FTSE 100 index slipped 0.6 per cent, or 46.74 points, to 7,457.86 points.
Housebuilder Berkeley dropped 4.4 per cent, or 160p, to 3510p as it came under fire for making millions in profits while calling affordable housing targets ‘unviable’.
Stock Watch – TLA Worldwide
TLA Worldwide, a specialist marketing business which represents Olympians such as Sir Chris Hoy and Rebecca Adlington, was booed off the pitch as it issued a trading update yesterday.
The firm had failed to organise as many events as expected this year, meaning financial results would be ‘significantly below market expectations’.
Debt would be much higher, and it was likely to breach repayment agreements with its lender. Shares tumbled 41.5 per cent, or 8.5p, to 12p.
It was behind only WPP in the index’s largest fallers yesterday. The advertising group, which welcomed new boss Mark Read on Monday, reported disappointing half-year results, causing shares to drop 6.3 per cent, or 80p, to 1196.5p.
But on the FTSE 250, the boss of Halfords motored into investors’ good books as the company bucked retail gloom to reveal sales were rising.
Customers bought more motoring and cycling products in the first 20 weeks of the year, and like-for-like sales increased at its car repair centres too. Shares climbed 6.9 per cent, or 22.6p, to 351.4p.
Overall revenue crept up 2.7 per cent, in what will be seen as a strong start for Graham Stapleton who joined as chief executive at the beginning of the year.
He is set to provide a strategy update later this month, but Laith Khalaf, analyst at Hargreaves Lansdown, said he saw ‘no need to reinvent the wheel’. Khalaf added: ‘In a retail market increasingly disrupted by online competitors, investing in personal services looks like the right approach.’
Meanwhile there was a glitch in the system for Alfa Financial Software, one of the world’s largest software providers to asset managers. Revenue dropped by 27 per cent to £32.9million, as operating profit plummeted for the first half of the year by 39 per cent to £8.6million.
Even though it had warned in June there were ‘delays in contracts’, shareholders still expressed their displeasure as Alfa slipped 6.6 per cent, or 10.4p, to 148p. Chief executive Andrew Denton insisted, however, that there was a ‘healthy’ pipeline of new business.
Seeing Machines, which makes the technology underlying driverless cars, also saw shares crash 28.4 per cent, or 2.9p, to 7.3p. It makes devices which allow machines to ‘see’ and react automatically, but its revenues are set to hit a road-bump for the year.
It blamed delays in the manufacture and shipping of its Guardian hardware, which uses sensors in lorry drivers’ cabs to measure their fatigue and distraction levels.