It recently became known that Nvidia has overtaken Amazon in capitalization. How significant is this event? To answer this question, it’s worth taking a look at the business of the largest online retail brand.

Amazon.com Inc., occupying a leading position in the online trading market, is demonstrating rapid growth in various areas of its activities. The company’s key areas are e-commerce, cloud services and digital advertising. In addition, the company offers products such as the Alexa personal assistant, Kindle e-readers, and movies and TV shows on the Amazon Prime Video platform. Amazon’s main competitors include Walmart Inc. and Alibaba Group Holding Ltd.

The scale of the company

The influence of Amazon.com on the modern world is difficult to overestimate. The company not only changed the way people shop, but also caused significant economic changes that went far beyond consumer behavior. Amazon directly and indirectly affects inflation, wages, and the profits of both large and small businesses.

Amazon’s dominant position in the US online retail market is illustrated by the 37.8% figure, which reflects the company’s share of total online retail sales. As part of Prime Day 2023, in two days, Amazon managed to earn $12.9 billion in the United States.

From a macroeconomic point of view, growth in consumer spending, wherever it occurs, is a positive factor for the economy, as it directly affects gross domestic product (GDP).

Amazon controls about a third of the global cloud market, significantly more than its closest competitors, namely Microsoft Corp.’s Azure. and Google Cloud from Alphabet Inc.

Amazon and inflation

Amazon’s operations have had a significant impact on traditional retail, accelerating the decline of already struggling players. The company’s focus on online sales allows it to significantly reduce costs compared to large retail chains. This gives Amazon a competitive advantage, allowing it to cut prices below competitors and operate at lower margins.

However, some economists have expressed concern about the deflationary effect caused by Amazon. Ideally, low unemployment would be accompanied by rising wages, which in turn stimulates inflation as companies pass on costs to consumers.

Investing in Amazon

On September 4, 2018, Amazon became the second trillion-dollar company by market capitalization. As of the end of August 2023, it was the fourth largest company in the United States by market capitalization, behind Apple, Microsoft and Alphabet.

Amazon founder, executive chairman and the company’s largest shareholder Jeff Bezos is often the richest person in the world, depending on current market prices. As of the end of August 2023, he was behind only Tesla founder Elon Musk and French luxury goods king Bernard Arnault.