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How Amazon’s Stock Fared in Comparison to the S&P 500


Apr. 20 2017, Updated 9:05 a.m. ET

Amazon’s amazing surge in last six years

Earlier in this series, we learned that in addition to ruling the cloud space, Amazon (AMZN) exhibits the most transparency in reporting growth. This transparency, along with Amazon We Services’ spectacular growth, could be why Amazon’s stock has soared in the last couple of years.

Between April 7, 2011, and April 7, 2017, Amazon’s stock price rose from $184.71 to $898.28. This increase of more than 386% is phenomenal compared with the S&P 500’s (VOO) cumulative return of 76.9%. Amazon’s total market valuation stands at ~$430 billion. Amazon also has a considerable presence in publishing and media.
it spending

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The cloud will continue to dominate information technology spending

According to Gartner’s recent estimates, spending on public cloud services is expected to grow by 17.4% to $245.4 billion in 2017. In constant currency terms, this is 19.1% growth.

Gartner’s estimates also show that IT (information technology) spending will continue to shift towards public cloud offerings from conventional IT systems, leading to high growth through 2021. Through 2021, growth rates are expected to fall slightly. IT spending is expected to grow at a CAGR (compound annual growth rate) of 15.9% to $436.4 billion. Amazon, the top player and holding a market share of 40%, will benefit most from this trend. This optimism, coupled with the company’s scale, competitive edge, and vision, has boosted Amazon’s stock. Microsoft (MSFT), IBM (IBM), and Google (GOOG), other leading players in the cloud, could also benefit from this trend.


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