In a Pacific Northwest battle to be the second most valuable company in the world — and potentially reach a $1 trillion market cap — Microsoft Corp. is on track to overtake Amazon.com Inc. on Friday.
Amazon AMZN, -7.71% has been No. 2 to Apple Inc. AAPL, -1.67% and even briefly flirted with a $1 trillion market cap in early September, but an October tech-stock swoon sent the Seattle e-commerce giant’s valuation to $869.2 billion at the close of Thursday trading. That valuation appears to be headed for a healthy trim on Friday, though, as Amazon shares have tumbled 8.5% in morning trading following the company’s third-quarter earnings report.
If that decline holds through the close, Amazon would be overtaken by Microsoft MSFT, -2.01% which enjoyed a 5.8% gain in Thursday trading after announcing earnings a day before Amazon. Its shares are off 2.3% in Friday morning trading, however, and if those losses hold through the close, Microsoft would end the day with an $812 billion market capitalization. If Amazon’s post-earnings decline holds, it would be worth about $799 billion.
Apple became the first company to top the $1 trillion barrier in August, beating out Amazon. Amazon topped the mark in a single intraday trade in early September, but has never closed a session with that high of a valuation. Several analysts expect Microsoft to eventually top $1 trillion as it continues to successfully battle Amazon in cloud-computing while enjoying gains in cloud software and its legacy personal-computer business.
Microsoft’s share price would need to top $130 at current share levels to reach $1 trillion. A dozen analysts have price targets for Microsoft of $130 or higher; the average price target of more than 30 analysts tracked by FactSet as of Friday morning was $125.69.
Amazon would need to top $2,045 a share to approach a $1 trillion valuation. After the e-commerce giant’s earnings report, the average price target on its stock from more than 40 analysts tracking the company was $2,183.67. Only eight of those analysts have targets lower than $2,050 a share.
