Will the Stock Outshine Nvidia, Apple, and Others by 2025's Close? Prediction of Superiority Over Tech Giants.
Hold on tight: Is Amazon about to dethrone tech heavyweights?
Say goodbye to the reign of tech giants like Nvidia, Apple, and Microsoft, for a new contender may soon march onto the stock exchange and claim the throne. The stage is set for an underdog to overtake these titans and become the most valuable company in the world. Let's take a closer look at the phenomenon that is Amazon.
A blockbuster waiting to happen?
Located in the realm of technological advancements, we find Amazon, Nvidia, Microsoft, and Apple often fighting for the title of the world's most valuable company. All have benefited from the insatiable hunger for Artificial Intelligence (AI), inflating their profits exponentially. But the time has come for a wild card to join the race. Prepare to meet: Amazon.
Onto the $4 trillion stage?
Financial experts have predicted that online retail giant Amazon could achieve a market capitalization of $4 trillion by 2025, leaving its competitors in the dust. In other words, if other companies in the stock market aren't having a record-breaking year in 2025, Amazon will be worth more than any other company in the world. But what makes this prediction more than just hot air? After all, Amazon's stock has only barely outperformed the US S&P 500 index in the past five years. Many eyes are on Amazon Web Services (AWS) as the driving force behind this astronomical growth.
In the second quarter of 2023, AWS sustained a 12% year-over-year growth, while managing a staggering 19% year-over-year increase by the third quarter of 2024. Some experts believe that AI demand will remain strong in 2025, fueling AWS's engine of growth. If revenue surges by approximately 25% in 2025, as these experts anticipate, AWS's total revenue could soar to around $130 billion.
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Sizing up Amazon's stock
It's easy to lose sight of Amazon's core business in all the commotion. Make no mistake, e-commerce, subscriptions, and advertising continue to generate a combined $377 billion in North America alone, with an additional $140 billion coming from international operations. Amazon is also venturing into new markets such as India, which promises a lucrative future.
Wall Street analysts are optimistic about Amazon's stock. Out of 49 analysts who track the stock, 48 recommend buying it. The average price target hovers around $250, promising an upside of almost 15%. Although this is paltry compared to Nvidia, it's worth noting that recent analyses from Morgan Stanley and HSBC have increased their price targets to $280 and $270, respectively, in January. So brace yourselves for a wild ride.
The big question: Can Amazon reach $4 trillion by 2025?
While Amazon shows immense potential for growth, reaching a market capitalization of $4 trillion by 2025 would require remarkable achievements across all its business segments. Current forecasts do not suggest such a rapid increase; however, Amazon has the ability to surprise us, just as it has done in the past. The future is bright for this technological titan.
- Amazon, with its immense potential in technology and investing, is poised to join the race of tech giants in the stock market, aiming for a market capitalization of $4 trillion by 2025.
- The growth of Amazon's Artificial Intelligence (AI) division, particularly Amazon Web Services (AWS), is a key factor in this prediction, as it recorded 12% year-over-year growth in Q2 of 2023 and a staggering 19% in Q3 of 2024.
- If AWS maintains this robust growth, as expected by some financial experts, it could generate around $130 billion in revenue by 2025, positioning Amazon as a formidable force in the stock-market landscape.
