Amazon.com, Inc. (NASDAQ:AMZN) is officially bigger than Wal-Mart now. The shares of Amazon picked up almost 10 percent on Friday. This happened on the account of a surprise second quarter profit that was reported. A hike of 20 percent is also experienced in the revenue of the company.
A stark increase in shares took the market value of Amazon to $247.77 billion. This value is higher than that of its rival Wal-Mart. It hints a sea change in retailing. Amazon is 20 years old now, and is valued more than any other retailer in the world.
The market value of Wal-Mart Stores, Inc is clocked at $230.53 billion. The company possesses 11,767 stores throughout the world and the sales of Wal-Mart are calculated at $485.65 billion until 31 January. The total sales of Amazon.com, Inc have been clocked at $89 billion.
The investors are impressed with the ability of Amazon to keep its costs in check while growing revenue at the same time. Amazon dedicated the profit to the continued strength of its cloud computing business and strong revenue growth in domestic as well as international circuits.
The market value of a company is measured by multiplying the number of shares of stock in circulation by the existing price of one share.
According to William Blair analyst Mark Miller, “When it is good, it is great: particularly as the business shifted to higher growth across a matrix of operating segments, product categories, and geographies in the second quarter.”
“In view of the sharply higher pre-opening stock price, the question is whether this is as good as it gets,” he added.
The revenue of the Amazon Web Services also jumped 81 percent to $1.82 billion. Cantor Fitzgerald analyst Youssef Squali said, “AWS was particularly robust. We believe that Amazon is now starting to move away from the heavy build years for its eCommerce business just as its top line accelerates, yielding the beginnings of the much sought-after margin leverage.”
The shares of Amazon raised to $47.24 or 9.8 percent and closed at $529.42. This implies to more than 47 percent in the last 12 months.