Will Amazon or Microsoft be the first trillion-dollar technology company?
The first trillion-dollar technology company could come out of the Puget Sound region.
Amazon and Microsoft have each been recently cited by analysts as the companies most likely to outpace Apple, Google and Facebook to reach a $1 trillion market capitalization.
Propelled by the Seattle company’s core retail business, RBC Capital managing director Mark Mahaney earlier this month predicted Amazon will reach the $1 trillion mark first. Mahaney expects Amazon’s retail business will grow 20 percent on average each year, and Amazon Web Services, the company’s cloud division, will grow 40 percent annually for the next five years.
Right now, Amazon (Nasdaq: AMZN) has a market capitalization of $364 billion. Venture fund Society Capital CEO Chamath Palihapitiya expects Amazon will be a $3 trillion company in the next decade.
Microsoft (Nasdaq: MSFT) is another contender. An early technology bellwether, the Redmond company was outpaced by technology industry competitors in the first decade of the millennium. Now – led by a new CEO with a fresh cloud-first, mobile-first vision – Microsoft is making a comeback.
The company’s stock recently reached an all-time high — eclipsing the previous record set before the dot-com bust — as Microsoft’s cloud business continues to grow. The company has a lead on Amazon with its nearly $490 billion market capitalization.
Firms including RBC Capital, Nomura, Raymond James, J.P Morgan, Wunderlich Securities and Merrill Lynch recently raised price targets for the company’s stock, signaling renewed confidence in Microsoft’s ability to grow.
A writer for Equities.com – a financial website that accepts submitted articles from users – on Monday predicted Microsoft’s recent LinkedIn acquisition will propel the company to become the first to reach a $1 trillion market capitalization. Michael Markowski wrote in a widely reported post on the website that Microsoft will reach the milestone largely because of the applications for LinkedIn in the online equity crowdfunding space. Markowski’s personal website reveals says he is co-founder of the World Crowdfunding Council.
Microsoft’s LinkedIn deal – which closed earlier this month – is a large part of the company’s revival. LinkedIn data will bolster Microsoft’s cloud and customer relationship management efforts to compete with top rivals Amazon Web Services and Salesforce, which also bid on LinkedIn.
While Apple's (Nasdaq: AAPL) market capitalization of $626.5 billion is the largest of any publicly traded company, Amazon and Microsoft are leaders in the fast-growing cloud computing space and analysts expect the companies' growth to outpace even Apple. Google parent company Alphabet (Nasdaq: GOOGL, GOOG) has a market capitalization of nearly $551 billion and Facebook (Nasdaq: FB) has a market capitalization of nearly $340 billion.
Ashley Stewart covers technology and finance for the Puget Sound Business Journal.