Dive Brief:
- Amazon has the potential of hitting the $1 trillion mark in value by the end of 2018, according to Morgan Stanley, reports CNBC. Amazon is a "bull case" expected to reach a $2,000 share price in the next year.
- The analysts alerted investors with a "sum of the parts methodology" and concluded that Amazon's retail business is valued at $600 billion and its advertising business is valued at $55 billion, according to the report. AWS was valued at approximately $270 billion with an 18% annual sales growth. An estimated $70 billion represents the company's Prime subscription business.
- Amazon's current market capitalization is close to $546 billion, reports Investor's Business Daily. The company still has a long way to go before it catches the world's current most valuable public company, Apple, which reached a $900 billion market capitalization last week.
Dive Insight:
Step aside Apple, Amazon is set to rule the world. It is unsurprising that Amazon could dethrone Apple as the world's most valuable company. After all, Apple maintains a technical focus whereas Amazon's market spans across industries, from e-commerce to business technology to Hollywood studios.
The same is true for its other mega competitor, Google. Both Apple and Google are confined by a lack of diversity in revenue, as Seeking Alpha reports. For example, two-thirds of Apple's revenues from 2014-2016 was made from iPhone sales.
The mega company, on the other hand, has its hands in retail, e-commerce, the cloud, entertainment, drones and even smart devices. The business technology community knows and loves Amazon for its IT products, but Alexa and convenient commerce are top of mind for customers. Amazon's efficiency appeal continues to gain momentum as a one-stop-shop for companies and consumers alike.
Still, experts predict Alibaba could outpace Amazon to the trillion-dollar mark. Much like Amazon, Alibaba has a wide-ranging market presence, but its cloud services had a year-over-year growth of 96% in Q1.
