JP Morgan believes the retail giant is ideally positioned to grow to be a trillion dollar company.
A top Wall Street firm predicts Amazon will reach the $US1 trillion milestone.
In a client note, JP Morgan pointed out that the retail giant only has a 10% share of the US online advertising market compared to its 42% share of e-commerce sales.
And JP Morgan analyst Doug Anmuth says Amazon is best positioned to compete with Facebook and Google, who dominate the global online ad market outside of China.
“We believe Amazon has the potential to be a $US1 trillion dollar company over time, as it remains early in the e-commerce and cloud secular shifts,” Anmuth wrote.
“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, and leading market share in smart home speakers with Alexa/Echo.”
Anmuth predicts it can generate sales growth in its ad business of more than 60% this year alone.
He has also raised his price target on the company to $US1,385 a share, up from $US1,375, which is 5.3% above a consensus estimate that factors in forecasts from 42 firms. This comes on the back of its 56% surge in 2017.
The Seattle-based company is currently the fourth-highest valued company in the US market at $US602 billion, so it would need to improve by approximately 66% from today’s levels to achieve the elusive number.
Founder and CEO Jeff Bezos was this week crowned the richest person in history. And a 13-figure valuation would only enhance his unprecedented wealth.
Jeff Bezos eclipses Bill Gates
Bloomberg’s Billionaire Tracker (BBT) put Jeff Bezos’s net worth at $105.1 billion on Monday, making him the wealthiest individual of all time. It has since ballooned to $106 billion.
CNN Tech reports the majority of his fortune comes from his 78.9 million shares in Amazon, while he also owns the Washington Post and space exploration company Blue Origin.
He passed Bill Gates twice in 2017 to head the billionaire list and first reached the $100 billion benchmark in October last year.
Forbes has poured cold water on the feat though, detailing why Gates is still the richest person in history.
It explains that at the height of the dot-com bubble in 1999, Gates was worth $100 billion. When you account for inflation that figure would be closer to $150 billion.
Even today, the Microsoft founder would be worth far more than Bezos and the $93 billion the BBT values him at, if he hadn’t donated $36 billion of Microsoft stock to charities over the years, mostly to the Bill and Melinda Gates Foundation.