The technology sector’s remarkable run on Wall Street this year produced a new milestone Tuesday as Amazon.com shares sold for $1,000 for the first time.
The Internet superstore has seen its share price double in less than two years, a period in which the Seattle company’s rapid growth around the world has upended the shopping, entertainment and data storage industries.
Hovering around the rarefied $1,000-mark will do little to change Amazon’s day-to-day business, but it could boost the company’s cachet and free it from some stock-market volatility.
“For a lot of consumers and investors, the checkered flag has been waved,” said Ryan Jacob, whose firm Jacob Asset Management specializes in tech investments. “Amazon is the dominant player in retail today, and it’s hard to imagine anyone having the resources to catch up.”
Just four U.S.-listed companies trade for more than three figures, though Google parent company Alphabet Inc. is nearing its first taste of $1,000 too. On Tuesday, Amazon traded as high as $1,001.20 before closing at $996.70, up 92 cents; Alphabet closed at $996.17, up $2.90.
At such high prices, shares of Amazon and Google are drawing additional scrutiny. There are concerns that prices will soon flatten and that too much growth concentrated on too few companies could squeeze out upstarts.
The tech giants’ shares also may be unaffordable for mom-and-pop traders picking up individual stocks. As the Internet sector boomed in the 1990s, many companies (including Amazon) split their stock to lower the price of a single share while still allowing shareholders to maintain the same percentage of ownership.
Finance experts say stock splits have fallen out of favor in the latest tech-stock frenzy. Individual investors are flocking to funds that hold a basket of stocks, such as exchange traded funds that mirror an index, rather than making bets on individual companies.