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In August 2018, Apple hit $1 trillion in market capitalization, a value that was much greater...

In August 2018, Apple hit $1 trillion in market capitalization, a value that was much greater than Amazon's market cap. Currently, their market caps are $400 billion apart. However, Apple's share price is substantially less than Amazon's share price. Based on your readings from the textbook, explain why this difference exists. Additionally, why do you believe investors are willing to pay more to invest in Amazon when it is worth less than Apple? Which company would you rather invest in and why?

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Answer #1

Apple price is lesser than amazon because it has more shares outstanding

Price = Mcap/shares outstanding

Investors are paying higher for amazon as number of shares outstanding are lesser compared to apple.

Invest in Amazon because it has higher growth potential as currently Mcap is lower than apple

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