Shares in online retail giant Amazon have risen above the $1,000 mark for the first time. Amazon has become the second S&P 500 component to hit the $1,000 price mark, with Google parent company Alphabet likely to also reach the milestone in the coming weeks. Priceline became the first company to reach the $1,000 mark in September 2013.
Market analysts have been quick to say that Amazon’s success is reflective of a massive rally in large-cap technology-related stocks. Shares of Amazon have indeed risen 33 per cent so far in 2017 alone, adding roughly $120 billion to its market value. And analysts expect further growth, with stock prices, on average, expected to rise another 10 per cent.
Among the other four largest U.S. companies, Apple and Facebook share prices have also risen nearly 33 per cent this year while Alphabet has gained 26 per cent and Microsoft has added 13 per cent.
However, a word of warning is sounding from some corners. Host of Mad Money Jim Cramer insists that the $1,000 stock value should be seen as a red flag rather than a resurgent market. "This temporary crossing of the $1,000 barrier is something that’s psychologically what I could call, I have to admit, a red flag,” Cramer said.
Likening the current share increase to a group of popular stocks called the Nifty Fifty in the 1970s, Cramer warned that excellerated growth cold leave investors bitter with the market. "This ‘Nifty Fifty’ concept went hand-in-hand with a blue-chip, buy-and-hold philosophy that said you didn’t need to touch these stocks as they would just keep going higher," he added.
And while the group, which included Coca-Cola and IBM, did not cause a full-blown crash, it effect left a lot of people unwilling to invest in the market at all. Boom or bust, Amazon’s $1,000 share price shows how far the company has come since first listing for $18 dollars a share in 1997 (if only I’d put my money on them!)