Amazon has become a more active corporate investor in recent years — and now its investment portfolio is worth $1 billion for the first time.
Amazon disclosed in its latest quarterly report that it now owns $1 billion worth of stock in public and private companies, as of the end of the second quarter. That's up 60 percent from the year-ago period's $623 million and a 163 percent increase from the $380 million it disclosed in the same quarter of 2016. Compared to early 2015, it's almost a fivefold increase in value.
The growth in Amazon's investment portfolio is the latest sign of the e-commerce giant becoming more aggressive with external investments. The change comes as the company has become more profitable and cash rich — and acquisitive — in recent years.
"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," said Thomas Ruchti, an accounting professor at Carnegie Mellon University.
Amazon disclosed that $593 million of the $1 billion investment is in public company equity and equity warrants that give it the right to purchase company stock in the future. The other $407 million worth of stock comes from privately held companies. In the same period of last year, $338 million of the investment value came from public company stock, with private company shares accounting for $285 million.
Amazon didn't provide details of the individual investments or holdings in each company. But it has announced investments worth roughly $400 million in two public companies in recent years: fuel cell maker Plug Power and air cargo provider Air Transport Services Group. It's also been part of funding rounds for more later stage startups, such as voice-powered sales software company Tact and cancer-detection start-up Grail, which typically require larger investments.
Amazon didn't respond to a request for comment.
"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," said Jarrad Harford, a finance professor at the University of Washington.