Tesla vs Amazon on the stock market: these two companies have seen their share performance grow the strongest in this troubled 2020.
Although Amazon has doubled the value of its shares since January, its performance pales in comparison to Tesla, which has multiplied its value by a factor of 10.
Amazon vs Tesla in the stock market
In January 2020, a Tesla share was worth around $70. Today, a Tesla share (listed on the Nasdaq) is worth $670. The highest value was reached in recent days, at $684.
What is driving the value of Tesla’s shares? Most certainly the fact that the electric car market is seen as the future. Elon Musk, CEO of Tesla, is a visionary. Not only does he produce electric cars, but he combines them with cutting-edge technology that makes each Tesla a masterpiece of engineering and comfort.
Sure, Tesla has to defend itself against competition from other brands in the sector, such as Nio, but at the moment orders seem to know no sign of decline, so much so that the company expects to produce 20 million electric cars a year.
In fact, according to Forbes, Tesla is in danger of bursting and becoming yet another market bubble. For the famous business magazine, Tesla’s growth is not supported by the fundamentals and this indicates that caution should be exercised.
The same Forbes chart shows that Amazon’s growth has actually been very modest. At the beginning of the year, Amazon was worth around $1,800, whereas today it is worth $3,200. The growth is certainly sharp, but far less than Tesla’s comparison.
Amazon peaked in September when it reached $3,550 in value and has since fallen back to the present day.
Just a few weeks ago, Amazon launched its Pharmacy and Pillback services, which not only contributed to its share price, but also dealt a blow to the shares of the pharmacy giants, who now fear that they will be displaced by Jeff Bezos’ company.
Certainly, the last period of the year is profitable for the ecommerce giant, widely used for Christmas gifts. But profits from online sales must also attract investor confidence.
In any case, the stock seems to be on a see-saw these days, with prices rising and falling. One thing is certain: Amazon will continue to benefit from the Covid-19 pandemic that has made purchases on e-commerce platforms take off. But just like Tesla, competition is also starting to make itself felt for Amazon.
In short, 2020 was an extraordinary year for Tesla and Amazon, but the real challenge will come in 2021. Amazon will probably have to deal with the end of the pandemic (thanks to the arrival of anti-Covid vaccines) and the resumption of purchases in physical stores. Both will also have to realize that the leading position in the market is not a given and that “the next best thing” is likely to be just around the corner.
The market in all its forms (customers and investors) will ultimately decide, as always.