Amazon Joins the Trillion-Dollar Market Cap Club Inc. (AMZN) has become the second company ever to join the $1 trillion market cap club, after its stock price crossed the much-eyed $2,050.27 per share threshold on Sept. 4, 2018. This comes just over a month after Apple (AAPL) hit the $1 trillion mark.  

A $1,000 investment in Amazon stock purchased at $18 a share in the company's initial public offering on May 15, 1997, would now be worth more than $1.1 million.

CEO and founder Jeff Bezos famously came up with the idea for Amazon while he was working at the legendary quantitative hedge fund the D. E. Shaw Group (then, D. E. Shaw & Co.). Bezos presented the idea to company founder David Shaw, who was not interested in launching an online bookstore. So Bezos left the company and in 1994, with Shaw's blessing, started Amazon with his wife MacKenzie (like Bezos, a Princeton and D.E. Shaw alum).

The site debuted in 1995, and made its first sale on April 3 of that year. The customer was a California-based software engineer named John Wainwright. His purchase? A book called “Fluid Concepts And Creative Analogies: Computer Models Of The Fundamental Mechanisms Of Thought” by Douglas Hofstadter.

All is forgiven

Amazon's trademark is its resilience—even indifference—to failure.

"You need to be making big, noticeable failures," Bezos has famously said. But how big are these failures, in the scheme of things? It is a testament to Amazon's reputation as an unslayable behemoth that few people can vividly remember its unsuccessful ventures. One example is the erstwhile, would-be eBay competitor Amazon Auction, launched in 1999. Though hardly the disruptor, it did become the precursor to the now-popular Amazon Marketplace.

Amazon Webstore, started in 2010 as a Shopify competitor, was shuttered in 2016. Similarly unimpactful were the disappearances of of Amazon's Gilt competitor MyHabit and the Amazon-Sotheby's cobranded auction site. Even the aborted iPhone/Samsung "rival" Fire Phone (2014-2015, RIP) —which would have felled or at least humiliated most companies—has rolled off Amazon like water off a duck's back. (Related: The 7 Worst Products Amazon Ever Had) In May 2016, Bezos told the Washington Post, “If you think that’s a big failure, we’re working on much bigger failures right now — and I am not kidding... Some of them are going to make the Fire Phone look like a tiny little blip.”

Amazon's 1-yr share price (made with Factset):

Prime and AWS

At least a dozen of Amazon's recently announced ventures have been hailed as "disruptive," from its 2017 purchase of Whole Foods to medical prescription deliveries to meal kits to its own clothing line. (Read: Amazon's Latest Disruption: Prime Rx Deliveries) But many analysts have said that the company's real future is in Prime and Amazon Web Services. The number of customers for the subscription-only Prime is a closely guarded secret, but Bezos finally revealed in an April 2018 investor letter that it is north of the 100 million mark.

The cloud, though, may be where it's at. Chamath Palihapitiya, CEO and founder of hedge fund Social Capital LP, said at the 2016 Sohn Conference, “In order to understand the value of AWS, we think that Jeff [Bezos] is going to completely disrupt this market." 

Amazon reported per its Q2 2018 earnings on July 26, 2018 that AWS had generated $6.11 billion in revenue, a growth of nearly 45% over the previous quarter and constituting 11% of the company's revenue.

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