Amazon's share value may reach almost three trillion dollars, predicts one analyst on Wall Street.
Amazon, currently the fourth-largest company on the stock market, is seemingly poised to close the gap with tech titans Apple, Nvidia, and Microsoft. With a market cap hovering around the $2 trillion mark, the e-commerce giant's stock is surging by 35% in 2023, outperforming its rivals except for Nvidia. Wall Street analysts are firmly in Amazon's corner, with one eyeing a $285 price point within the next year, representing a 39% increase from current levels.
The underdog's comeback story is fueled by its foray into artificial intelligence (AI), a sector brimming with potential. The company's AI prowess is evident in its cutting-edge solutions for retailers, including accurate product recommendations and delivery services. Moreover, Amazon's cloud computing division, AWS, is leveraging AI to offer invaluable tools to companies of all sizes. From building founding models to generating marketing campaigns, AWS's AI offerings are proving to be a game-changer for businesses.
Amazon's e-commerce dominance, accounting for almost 40% of U.S. e-commerce sales, provides a solid foundation. The company's unmatched logistics network and ceaseless drive to innovate ensure it maintains its edge in this competitive landscape. In the last two years, Amazon has significantly upgraded its outbound distribution network and is now focusing on the inbound portion, witnessing a remarkable boost in productivity.
Furthermore, the advertising industry is thriving, with Amazon's third-quarter 2023 sales skyrocketing 19% year-over-year. The company's dual focus on expanding its advertising offerings and unlocking the potential of video advertising on its streaming platform will further propel its growth. Meanwhile, other ventures, including streaming services and pharmacy, are also gaining momentum.
To hit the $3 trillion market cap, Amazon would need to see its price-to-sales ratio and price-to-earnings ratio remain constant while its net income soars and its sales increase substantially. While growing sales to $850 billion within the next year may seem unattainable, a higher price-to-sales ratio or continued improvement in net income might still enable Amazon to reach the coveted $3 trillion valuation.
Despite the challenges, Amazon's positioning in AI and other growth sectors, coupled with its strong market position and a management team focused on profitability, lend credence to the possibility of reaching the $3 trillion milestone.
Investors looking at Amazon's financial growth may consider investing more money in its stocks, given its steady performance and potential for further growth. With the company's focus on AI and cloud computing, the finance sector anticipates impressive returns, making Amazon an attractive investment opportunity in the finance world.
