Arthur J. Villasanta – Fourth Estate Contributor
Seattle, WA, United States (4E) – Amazon, the world’s largest internet retailer by revenue and market capitalization, stands to become the world’s first trillion dollar business by late 2019.
Financial analysts believe Amazon’s market capitalization, which now stands at $730 billion, might hit $1 trillion over the next 18 months on account of its huge growth potential its core e-commerce business, as well as in its healthcare, advertising and the smart-speaker market ruled by Alexa, the intelligent personal assistant developed by Amazon and first used in the Amazon Echo and Amazon Echo Dot smart speakers.
Amazon’s stock has soared 30% this year due to impressive growth in its core e-commerce business plus gains from its acquisition of Whole Foods in 2017 and revenues from its AWS cloud division.
“We expect considerable strength from Amazon across the board over the coming quarters,” said Daniel Ives, a financial analyst at GBH Insights, a market research firm based in New York City.
“While a trillion-dollar market cap will not happen overnight, we believe the path is now set for this to occur over the next 12 to 18 months.”
Ives’ research note didn’t say if Amazon can beat Apple, Inc. to become the first trillion company, but the roadmap detailed in the note makes a strong case for Amazon’s getting there first.
Apple, the world’s largest publicly traded company, is currently closer to the trillion dollar mark than Amazon. Apple currently has a market cap of $910 billion and became the first company in the world to hit a market cap of $900 billion in early November 2017.
Apple, however, hasn’t been able to significantly increase the November record, and investors worry about demand for its new generation of iPhones to be revealed this November.
Amazon appears set to grab a greater share of e-tail sales. Its profitable Prime membership service continues to grow, while the smart home business it pioneered with Echo looks like a huge market opportunity.
Amazon also looks like it’s well positioned for significant growth in claims in the advertising and healthcare markets, said Ives. Ives raised his price target on Amazon to $1,850 a share from $1,500.
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