Interesting how pets.com is so ridiculed but something like a books.com (amazon) became the one of most valuable companies in the world.
Worth remembering Amazon invested in pets.com though...
This actually sounds exactly like the current tech unicorn overvaluation party we find ourselves in.
I don't follow the premise.
Amazon became so valuable because of AWS, not because of their retail operations. Its hyper low margin retail division might be worth $120-$150 billion in a sane market. It's considerably smaller and less profitable than Walmart for example. It's not trivial of course, however they'd still be a lot smaller than the other titans of market cap. More like Costco, less like Microsoft. And at this point their retail segment is slow growth, so the stock would probably be under compression duress about now, the bloom would be off the valuation rose.
Amazon's recent market value ramp begins when they start showing off the growth and profit potential of AWS. In the first part of 2015 they showed off the figures, the stock promptly skyrocketed four fold in three years afterward (it was previously on a slow, quite gradual climb and had not gone net higher in about 1 1/2 years).
I’m not saying AWS is worth Amazon’s current market cap minus $375B. Could have both segments being valued less by the market as one combined company. It’s just I have a hard time seeing Amazon worth around $150B in late 2014, which def includes some of AWS pre-publicly being reported in earnings, not being worth around triple that amt now with the way stocks have gone. Assuming AWS was valued at $20 in 2014.
For the growth, their retail growth has slowed. Under 20% a year now. But their growth in subscription (Prime mostly) and advertising are still growing at above 1/3. Like AWS. So the company wouldn’t have nothing for the stock to be speculatively high on without AWS.