Amazon: The Next two Trillion Giant after Microsoft and Apple

Analysts are Predicting Amazon to be the next two trillion giant after Microsoft and Apple.

Data from S&P Global Market Intelligence and MarketSmith reveal that consumer discretionary giant Amazon (AMZN) is poised to be $2.1 trillion worth in 12 months or less and become the third trillion giant after Microsoft and Apple. This would make Amazon the first S&P 500 company outside of the information technology sector to hit a $2 trillion or higher valuation. To be successful in this endeavor, Amazon's market value must jump 15% from its current $1.7 trillion market capitalization to hit $2 trillion. Analysts are calling for Amazon's stock price to jump nearly 23% in 12 months to 4,238 a share. The stock closed Thursday at 3449.08. Giant market capitalization gains continue to mint massive companies and it results in huge S&P 500 stock gains. The top 10 most valuable S&P 500 make up roughly a third of its value and Amazon is just one of them. Being the third S&P 500 to hit a market value of $2 trillion would demonstrate its key role in the economy.

The Path to the Top

Apple, first closed at the $2 trillion thresholds on Aug. 20, 2020. Surging demand for smartphones pushed Apple's value from $1 trillion on Aug. 2, 2018, to $2 trillion in just 749 calendar days. On the other hand, it took Microsoft just 786 days to grow from $1 trillion on April 30, 2019, to $2 trillion on June 24, 2021. Additionally, Microsoft hit the $2 trillion mark just 308 calendar days after Apple did it. At present, the analysts are calling for Amazon.com to do something similar. If forecasts are right, it would hit the $2 trillion mark less than 360 days from the time IBD Long Term Leader Microsoft did it on June 24. And Amazon first closed above $1 trillion 505 days ago on Feb. 5, 2020.

The Consequences of the Growth

Looking at future growth prospects, while some Wall Street analysts are concerned about the departure of Jeff Bezos as Amazon chief, Ben Dunbar, managing partner of Gerber Kawasaki Wealth & Investment Management stated in an interview with Forbes that Amazon has leaders that have been with the company for a long time and know-how to run the business as Bezos does. Even if regulators force the company to break up, Amazon has such a varied connection with industries it would not harm the company as a whole. The services provided by Amazon go back to amazon shopping, Amazon Fresh, Amazon Prime, Audible to Amazon Web Services, and databases. The Cloud computing unit of Amazon Web Services continues to dominate as the prime subscriptions grow further. The current pandemic has also pushed the focus on convenience. People are forced to stay indoors all the time and the need for entertainment has grown a lot and they are more inclined to subscribe to amazon prime for good content.  AWS is also on a $50 billion-plus annual run rate of revenue and is hugely profitable. The advertising spend is also growing.