Amazon has surpassed Microsoft to become the world’s most valuable public company by market capitalisation and analysts predict its share price will continue to grow based on its digital advertising potential.

​At close of US trading on Monday Amazon stock was up 3.4 per cent giving it a market value of around $US797 billion.

Microsoft’s market cap of $US783 billion puts the tech giant in second position while Google’s parent company Alphabet is third valued at $US756 billion.

Apple has slid from the lead in November to fourth with a market cap hovering around $US700 billion. It has been a rough few months for Apple, which is down 39 per cent since since peaking in value in October. Poor iPhone sales and a softening Chinese market forced Apple to slash its revenue forecasts by several billion dollars last week. 

As the chart below from Statista illustrates, Apple has lost more than the market capitalisation of Facebook, Alibaba and Starbucks between October 3 and January 3, 2019.

Infographic: Apple's Shocking Market Decline In Perspective | Statista You will find more infographics at Statista

Advertising potential

Amazon’s value may yet increase, according to Pivotal Research senior analyst Brian Wieser. He argues Amazon’s strong growth in its advertising business, generating around $US9 billion in 2018, will continue, eventually accounting for one tenth of Amazon’s total revenue.

“At around ten per cent of the global total in 2023, Amazon will easily be the ‘third force’ in digital advertising after Google and Facebook, although it will still be substantially smaller than the $US215 billion in annual revenue we expect Google to generate or the $US59 billion we expect to see from Facebook,” Wieser said in a note to clients on Sunday.

Amazon actually disappointed investors in its recent Q3 results, with shares sliding on the news. The all-important fourth quarter results for Amazon are expected early next month.

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