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Chart: Amazon’s Dominance in Ecommerce

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This Chart Shows Amazon's Dominance in Ecommerce

This Chart Shows Amazon’s Dominance in Ecommerce

It’s no secret that Amazon is dominant in ecommerce.

But despite this being common knowledge, the most recent data behind the explosion in Amazon’s market position is still stunning to behold: in the last two years, the already monstrous Amazon somehow was able to increase their share of the total U.S. ecommerce market from 38% to 49%.

Amazon holds almost half of the massive $252.7 billion market – that’s more than double the market share of the next nine companies (including eBay, Walmart, Best Buy, Apple, etc.) combined!

Leaders and Laggards

Capturing a 50% share of a coveted U.S. ecommerce market is impressive, especially considering Amazon is up against many formidable retailers:

RankCompanyMarket Share (2018)
#1Amazon49.1%
#2eBay6.6%
#3Apple3.9%
#4Walmart3.7%
#5The Home Depot1.5%
#6Best Buy1.3%
#7Qurate Retail Group1.2%
#8Macy's1.2%
#9Costco1.2%
#10Wayfair1.1%

Retailers like Walmart and Best Buy are collectively throwing billions of dollars to get a foothold online. The competition is certainly fierce, but Amazon has still been able to achieve astronomical growth:

201620172018
Amazon market share38.1%43.5%49.1%

Will Amazon cap out at 50%, 60%, 70%, or beyond?

At this point no one can tell – but regardless of where the growth ends, such a level of dominance has never been achieved in the retail market like this before.

A Prime Driver

Although not as stunning as overall ecommerce market share, the company’s Prime Day numbers also illustrate the vast size and scale of the company.

The most recent rendition of the annual event in July 2018 raked in $4.2 billion of revenue in a 36-hour period, even though the company had well-publicized technical issues that cost the company $72 million.

2015201620172018
Prime Day Sales$0.9B$1.5B$2.4B$4.2B

The 2018 event brought a revenue increase of 74% – and Prime Day now generates more sales than Cyber Monday or Black Friday ecommerce sales.

There’s no doubt that the Jeff Bezos Empire is holding strong: with $900 billion in market capitalization, Amazon is now in the conversation to join Apple in hitting the $1 trillion milestone in the coming months.

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Nvidia Joins the Trillion Dollar Club

America’s biggest chipmaker Nvidia has joined the trillion dollar club as advancements in AI move at lightning speed.

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Nvidia Joins the Trillion Dollar Club

Chipmaker Nvidia is now worth nearly as much as Amazon.

America’s largest semiconductor company has vaulted past the $1 trillion market capitalization mark, a milestone reached by just a handful of companies including Apple, Amazon, and Microsoft. While many of these are household names, Nvidia has only recently gained widespread attention amid the AI boom.

The above graphic compares Nvidia to the seven companies that have reached the trillion dollar club.

Riding the AI Wave

Nvidia’s market cap has more than doubled in 2023 to over $1 trillion.

The company designs semiconductor chips that are made of silicon slices that contain specific patterns. Just like you flip an electrical switch by turning on a light at home, these chips have billions of switches that process complex information simultaneously.

Today, they are integral to many AI functions—from OpenAI’s ChatGPT to image generation. Here’s how Nvidia stands up against companies that have achieved the trillion dollar milestone:

Joined ClubMarket Cap
in trillions
Peak Market Cap
in trillions
AppleAug 2018$2.78$2.94
MicrosoftApr 2019$2.47$2.58
AramcoDec 2019$2.06$2.45
AlphabetJul 2020$1.58$1.98
AmazonApr 2020$1.25$1.88
MetaJun 2021$0.68$1.07
TeslaOct 2021$0.63$1.23
NvidiaMay 2023$1.02$1.02

Note: Market caps as of May 30th, 2023

After posting record sales, the company added $184 billion to its market value in one day. Only two other companies have exceeded this number: Amazon ($191 billion), and Apple ($191 billion).

As Nvidia’s market cap reaches new heights, many are wondering if its explosive growth will continue—or if the AI craze is merely temporary. There are cases to be made on both sides.

Bull Case Scenario

Big tech companies are racing to develop capabilities like OpenAI. These types of generative AI require vastly higher amounts of computing power, especially as they become more sophisticated.

Many tech giants, including Google and Microsoft use Nvidia chips to power their AI operations. Consider how Google plans to use generative AI in six products in the future. Each of these have over 2 billion users.

Nvidia has also launched new products days since its stratospheric rise, spanning from robotics to gaming. Leading the way is the A100, a powerful graphics processing unit (GPU) well-suited for machine learning. Additionally, it announced a new supercomputer platform that Google, Microsoft, and Meta are first in line for. Overall, 65,000 companies globally use the company’s chips for a wide range of functions.

Bear Case Scenario

While extreme investor optimism has launched Nvidia to record highs, how do some of its fundamental valuations stack up to other giants?

As the table below shows, its price to earnings (P/E) ratio is second-only to Amazon, at 214.4. This shows how much a shareholder pays compared to the earnings of a company. Here, the company’s share price is over 200 times its earnings on a per share basis.

P/E RatioNet Profit Margin (Annual)
Apple30.225.3%
Microsoft36.136.7%
Aramco13.526.4%
Alphabet28.221.2%
Amazon294.2-0.5%
Meta33.919.9%
Tesla59.015.4%
Nvidia214.416.19%

Consider how this looks for revenue of Nvidia compared to other big tech names:

For some, Nvidia’s valuation seems unrealistic even in spite of the prospects of AI. While Nvidia has $11 billion in projected revenue for the next quarter, it would still mean significantly higher multiples than its big tech peers. This suggests the company is overvalued at current prices.

Nvidia’s Growth: Will it Last?

This is not the first time Nvidia’s market cap has rocketed up.

During the crypto rally of 2021, its share price skyrocketed over 100% as demand for its GPUs increased. These specialist chips help mine cryptocurrency, and a jump in demand led to a shortage of chips at the time.

As cryptocurrencies lost their lustre, Nvidia’s share price sank over 46% the following year.

By comparison, AI advancements could have more transformative power. Big tech is rushing to partner with Nvidia, potentially reshaping everything from search to advertising.

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