Amazon joins the $trillion giants

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 wellknown part of the business, “has huge scope to grow in the rest of Europe and Asia, especially India”, he said. 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 7457.86 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”. It was behind only WPP in the index’s largest fallers. The advertising group’s shares shed 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. Shares climbed 6.9 per cent to 351.4p.

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.”

NO NEED TO REINVENT THE WHEEL … INVESTING IN PERSONAL SERVICES LOOKS LIKE THE RIGHT APPROACH.

ANALYST LAITH KHALAF