One trillion Amazon: when will the firm cross that milestone?
How soon will it be until we see a one trillion Amazon? That’s the question exercising analysts and pundits. A valuation of one trillion dollars for Amazon would establish founder and CEO Jeff Bezos firmly as the richest man in the world. But is it likely to happen any time soon?
Amazon may reach the $1 trillion market valuation milestone as it dominates new growth markets, according to a top Wall Street firm. J.P. Morgan has again reiterated its overweight rating for Amazon shares, citing its strong growth for its internet advertising business. Amazon is so much more than an ecommerce business, of course, the AWS aspect of the organisation (that offers cloud hosting) is hugely profitable.
J.P. Morgan analyst Doug Anmuth wrote in a note to clients this week: “We believe Amazon has the potential to be a $1 trillion dollar company over time, as it remains early in the ecommerce & cloud secular shifts and in our view Amazon is investing in more major growth opportunities than any other company we cover.”
Amazon already enjoys 10% of the online advertising market. And as, we have reported before, something like 44% of the US ecommerce market. Facebook and Google still loom large in the global online ad market outside of China. But there is still huge room for growth.
Anmuth also said: “We believe advertisers and agencies would welcome a third scaled digital player. Amazon is best positioned in our view, with its in-market customers, scale, strong access to data, shopping history, ability to close the loop, & leading market share in smart home speakers with Alexa/Echo.”
Obviously, a thriving Amazon is good news for online merchants. But equally there must concerns about its potential size and potentially unassailable dominance when it comes to competition.
When Amazon launches its onslaught of advertising exchanges similar to Google, it will surely capture a huge slice of the pie.