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In a Pacific Northwest battle to be the second most valuable company in the world — and potentially reach a $1 trillion market cap — Microsoft Corp. is on track to overtake Amazon.com Inc. on Friday.
Amazon
AMZN, +7.09%
has been No. 2 to Apple Inc.
AAPL, +2.19%
, and even briefly flirted with a $1 trillion market cap in early September, but an October tech-stock swoon sent the Seattle e-commerce giant’s valuation to $869.2 million at the close of Thursday trading. That valuation appears to be headed for a healthy trim on Friday, though, as Amazon shares dropped 7.4% in after-hours trading following its third-quarter earnings report.
If that decline holds, Amazon would be overtaken by Microsoft
MSFT, +5.84%
, which enjoyed a 5.8% gain in Thursday trading after announcing earnings a day before Amazon. Microsoft ended Thursday’s session with a market cap of $831.5 million, according to FactSet; if Amazon’s post-earnings decline holds, it would be worth less than $810 million.
Apple became the first company to top the $1 trillion barrier in August, beating out Amazon. Amazon topped the mark in a single intraday trade in early September, but has never closed a session with that high of a valuation. Several analysts expect Microsoft to eventually top $1 trillion as it continues to successfully battle Amazon in cloud-computing while enjoying gains in cloud software and its legacy personal-computer business.
Microsoft’s share price would need to top $130 at current share levels to reach $1 trillion. A dozen analysts have price targets for Microsoft of $130 or higher; the average price target of more than 30 analysts tracked by FactSet as of Thursday afternoon was $125.69.
Amazon would need to top $2,050 a share to approach a $1 trillion valuation. Before any changes in response to Thursday’s earnings report, the average price target on Amazon stock from more than 40 analysts tracking the company was $2,212.98. Only five of those analysts have targets lower than $2,050 a share.
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