Business is booming over at Amazon. In the retail giant's latest quarterly report, it is revealed that the company owns a total of roughly $1 billion worth of stock in various other companies, both public and private, in what is a significant recent increase in such investments by Amazon.
It's part of an overall trend of more aggressive investment by Amazon in recent years, and compared to how much the company had invested in other companies at this time last year, it's an increase of 60 percent. Take that comparison back to 2015, and Amazon's investments have increased nearly five fold in the last three years. Thomas Ruchti, accounting professor at Carnegie Mellon University, commented on the report for CNBC:
"While Amazon hasn't in the past really been focused on equity investments, it seems like it's taking a lot more interest in investing in other companies, both public and private."
Not included in the report is any information on the specifics of Amazon's investments. But in the past, Amazon has disclosed some such investments it wished to make public, like its investments of around $400 million each in fuel cell company Plug Power and the Air Transport Services Group, which provides air cargo services. In addition, Amazon has also come through for "later stage startups" like cancer detection service provider Grail and voice command firm Tact, both of which needed large investments to get the wheels turning. As Jarrad Harford, finance professor at the University of Washington, puts it:
"It's safe to say that Amazon is active in venture capital investing, and their investments – like many in the current market — are increasing in value."
Amazon's billion dollars worth of outside investments might sound like a lot from the outside, but actually it's pretty typical for companies at its level. Microsoft and Salesforce, for example, have also disclosed roughly a billion dollars in comparable investments recently, while Alphabet (the company behind Google) had $8.8 billion worth of stock in various companies as of the end of last year.