Amazon Inc. may be the one that got away from legendary investor Warren Buffett–at least for now. The Oracle of Omaha said Amazon’s shares “always looked expensive,” and that he underestimated the ecommerce and cloud-computing behemoth–which boasts a market value of $446 billion, second only to Apple Inc. at $781 billion–potential dominance. Amazon CEO Jeff Bezos is the world’s third richest man, behind Microsoft Corp. founder and Buffett chum Bill Gates and Spanish billionaire Amancio Orega, according to Bloomberg’s index of the wealthiest people in the world. On Saturday, during Berkshire Hathaway Inc.’s annual shareholder meeting, Buffett said he “didn’t think [Bezos would] be where he is today when I looked at [Amazon]” years ago. Buffett told CNBC on Friday that Bezos’s success has surprised him. “I’ve never seen a guy succeed in two businesses almost simultaneously that are really quite divergent in terms of customers and all the operations,” he said, referring to the company’s retail business and its cloud-computing operation. Shares of Amazon have climbed roughly 25% year to date, compared with 7.1% for the S&P 500 Index over the same period. The Dow Jones Industrial Average has risen 6.3%, while the Nasdaq Composite Index has enjoyed a 13.3% in 2017, so far. Amazon’s performance has even outstripped the exchange-traded Technology Select Sector SPDR ETF , which is up 13.7% so far. As far as expenses go, Amazon is rich relative to the broad market, it has a price-to-earnings ratio, one popular measure of value, of 175 times, compared with a P/E of roughly 18 times for the S&P 500., according to FactSet.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News