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Apple vs Amazon vs The World: Trillions, billions and 108,000% gains

August 6, 2018 by Cody Willard Leave a Comment

Let’s do this week’s Live Q&A Chat in the Trading With Cody Chat Room at 9am ET tomorrow (Tuesday) morning. But first, here’s some how-do-they-compare analysis that I like to do sometimes to keep my head around the size of some very important numbers which can yield some fascinating analysis.

Apple vs Amazon vs The World

  • Total global Gross World Product (GWP) (essentially GDP) will be close to $90 trillion in 2018.
  • Total US Gross Domestic Product (GDP) will be close to $20 trillion in 2018.
  • Apple’s market cap is $1 trillion (equivalent to about 5% of the US economy)
  • Amazon’s market cap is $900 billion (equivalent to about of the 1% of the whole world’s entire economic activity).
  • Apple will probably do close to $276 billion in sales in 2019, up from $263 billion this year (equivalent to more than 1% of the US GDP or 1 cent of every dollar*  — *Interestingly, much of Apple’s sales outside of US probably wouldn’t be counted as “Domestic” in GDP, just as as an FYI).
  • Amazon will probably do close to $286 billion in sales in 2019, up from $234 billion this year (Amazon is now generating revenues the equivalent to nearly than 1.5% of the total US GDP** — ** And unlike Apple, almost all of Amazon’s revenue is generated in the US).
  • Apple will buyback more than $100 billion of AAPL shares this year and issue close to $15 billion in dividend payments to shareholders this year (equivalent to about 0.6% of US GDP).
  • Amazon hasn’t bought back a share of AMZN in years and probably won’t this year either. No dividends in sight either.
  • Apple’s expected to generate close to $70 billion in profits in 2019, up from close to $60 billion in profit this year.
  • Amazon’s expected to generate close to $13 billion in profits in 2019, up from close to $9 billion in profit this year.
  • Apple is up about 51,000% since its IPO 38 years ago for an 18% annualized gain.
  • Amazon is up about 108,000% since its IPO 21 years ago for an 40% annualized gain.
  • Apple has almost 5 billion shares outstanding.
  • Amazon has almost 500 million shares outstanding.
  • Apple has Siri, which sucks.
  • Amazon has Alexa, which has become the de facto standard platform of The Voice Revolution.

I own both stocks (and Alexa and Siri) and have owned both stocks for a long time (and Alexa ans Siri) and plan to keep on holding most of my shares of each (I don’t plan to use Siri much anytime soon, but I use Alexa many times most days).

On a related note, this headline about how Goldman Sachs expects our stock market to get $1 trillion boost via buybacks underscores how more than 1% of the world’s total gross economic activity (revenues, topline!) will be spent buying back global corporation’s stocks this year. If net earnings from that $90 trillion in global economy is probably at best 10% (the S&P 500’s average profit margin is 11%), that would mean that global corporations will spend the equivalent of than 10% of the world’s profits on buybacks.

So I’ll see you bright and early for this week’s Live Q&A Chat in the Trading With Cody Chat Room at 9am ET tomorrow (Tuesday) morning.Here’s some valuable commentary from the chat room community from over the weekend and this morning:

 

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Disclosure: At the time of publication, the firm in which Willard is a partner and/or Mr. Willard had positions in some of the stocks mentioned above although positions can change at any time and without notice.

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This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or cryptocurrency or token any other product or service by Cody Willard or any other third party. Furthermore, nothing in this is intended to provide tax, legal, or investment advice and nothing in this should be construed as a recommendation to buy, sell, or hold any investment or security or cryptocurrency or token or to engage in any investment strategy or transaction. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal or tax situation.

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