In a week that saw the S&P 500 fall about 6%, there were plenty of stock market headlines. But three stories in tech stood out for investors.
- Amazon.com's (NASDAQ:AMZN) market capitalization vaulted higher than Alphabet's (NASDAQ:GOOGL) (NASDAQ:GOOG) for the first time.
- Dropbox (NASDAQ:DBX) stock soared after it went public on Friday.
- Rumors surfaced ahead of Apple's (NASDAQ:AAPL) event next week.
Amazon's massive market cap
Though it was a down week in the stock market, Amazon still managed to achieve a major milestone by passing up Alphabet's market capitalization. Even more, its lead over Alphabet widened by the end of the week, with Amazon's market cap about $10 billion ahead of Alphabet.
Amazon's massive market cap puts the spotlight on investors' high expectations for the e-commerce and cloud-computing company. Consider the enormous difference in Amazon and Alphabet's valuation metrics. Amazon currently trades at 327 times earnings and 112 times free cash flow. Meanwhile, Alphabet has price-to-earnings and price-to-free cash flow ratios of 32 and 21.
Data-storage company Dropbox made its debut on the Nasdaq with a bang. The stock finished its first trading day up 36% from its IPO price of $21.
What's particularly notable is that Dropbox's $21 IPO price had already been boosted in the week leading up to its debut. Initially, Dropbox stocked was planned to kick off at a range of between $16 and $18. That changed to a range of $18 to $20 before the official price finally settled to $21.
After a strong first trading day, Dropbox now trades at $28.48 and boasts a market cap of about $12.4 billion, dwarfing competitor Box, which has a market cap below $3 billion.
On Tuesday, Apple will hold an event at Lane Tech College Prep High School in Chicago. With press invitations to the event reading "Let's take a field trip," the event is shrouded in mystery. All Apple is saying about the event is that it will be focused on "creative new ideas for teachers and students."
Fortunately, the Apple rumor mill's most reliable tipster, Bloomberg's Mark Gurman, released a preview of what to expect. New iPads are "definitely on deck," he said, "cheaper models, entry-level, something geared toward students and teachers, being able to be purchased in bulk." Gurman also predicted Apple will roll out a cheaper version of the Mac laptop since the event is taking place right around the 10-year anniversary of the MacBook Air.
Beyond hardware, Gurman said Apple will introduce a revamped strategy for its electronic book application, iBooks. The new version will be called Apple Books, he said.