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Why Amazon Stock Hit a Record High Above $3,000 Today

By Joe Tenebruso – Jul 6, 2020 at 6:40PM

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This elite business just keeps on winning.

What happened

Shares of (AMZN -1.92%) climbed 5.8% on Monday to a new all-time high of $3,057. At that price, the e-commerce and cloud computing titan's market capitalization now exceeds a staggering $1.5 trillion.

So what

Positive economic news out of China likely contributed to the gains in Amazon's share price. Many of Amazon's third-party merchants source their goods from Chinese manufacturers. Shipping delays have weighed on these merchants' -- and, by extension, Amazon's -- sales and profits in recent weeks, and a return to more normal shipping times will be a welcome relief for businesses and customers alike.

A person is pointing to an upwardly sloping digital chart.

Amazon stock climbed above $3,000 for the first time on Monday. Image source: Getty Images.

From a longer-term perspective, what's driven Amazon's stock to such astounding heights is its dominance of not one, but two massive and rapidly growing markets: e-commerce and cloud computing. Amazon controls the lion's share of the online retail market in the U.S. and many other countries, and Amazon Web Services is the clear leader in the global cloud infrastructure market. Together, these enormous industries are projected to generate roughly $7 trillion in annual revenue by 2023. 

Now what 

Amazon's stock is an excellent example of one of the most important lessons an investor can learn: Winners tend to keep on winning. Since its initial public offering (IPO) in 1997, there's never been a bad time for long-term investors to buy shares of Amazon. Even today, this incredible stock remains an outstanding investment.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.

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