Microsoft overtakes Amazon as second most valuable US company
SAN FRANCISCO: Microsoft Corp regained its spot as the second most valuable US company after a disappointing quarterly report from Amazon.com wiped US$65 billion off the online retailer’s market capitalisation.
Apple Inc tops the list at over US$1 trillion after crossing that threshold in September. Microsoft’s market capitalisation was Wall Street’s highest in late 1998 through early 2000 before the dot-com bubble burst.
Amazon’s shares dropped seven per cent, the most in nearly three years after its holiday season sales outlook missed targets, fanning concerns that Wall Street’s tech darlings are finally starting to face stronger competition.
Microsoft fell a more modest 1.1 per cent in a broad technology sell-off that was also driven by a weaker-than-expected report from Google-parent Alphabet Inc), leaving the Nasdaq composite index down 1.9 per cent late Friday afternoon.
Shares of Microsoft remain up nearly four per cent from Wednesday, when the fourdecade-old software company beat quarterly profit expectations, driven by its cloud computing business that competes with Amazon’s.
Its stock market value on Friday stood at US$823 billion, on track to close above Amazon’s for the first time since April, when it gave up its spot as second largest company by market capitalization.
Amazon was worth US$805 billion on Friday, after falling below Microsoft’s in extended trade on Thursday. The drop was equivalent to the combined values of Target Corp and Corning Inc.
Amazon’s tumble left it up around 40 per cent year to date, while Microsoft has gained about 25 per cent in 2018. On Wednesday, Amazon’s stock traded at the equivalent of 70 times expected earnings, its lowest level since 2011.