Amazon.com Inc Is AMZN A Multi-Bagger Stock Even Today

Flickr

Amazon.com Inc. (NSDQ:AMZN) stock has been on a tear for the better part of the last 2 decades. AMZN stock price is up from its split-adjusted IPO price of $1.5, closing the last trading session at $767.33, a whopping 511X return in a little under 2 decades. While these historical returns definitely qualify as multi-bagger returns, could Amazon be a multi-bagger stock even today? At a market cap of $367.3B (as of Dec 8 closing price)? Well, that’s what a couple of Amazon bulls on Wall Street think. And, according to them, Amazon could be worth a trillion dollars or more within a decade from now. So, how realistic are those claims and can AMZN stock realistically hit those levels?

Amazon Market Cap Could Hit $1 Trillion In 5 Years

Yes, you read that right. Amazon could well be on the way to becoming the first $1 Trillion market cap company. RBC capital analyst Mark Mahaney recently laid out his aggressive outlook on AMZN stock and the path to a $1 trillion market cap. Though the analyst did claim that his analysis is ‘Just for fun’, there is a possibility of his outlook turning into reality. As reported by Business Insider:

Basically, Mahaney forecasts Amazon’s retail business will continue to grow 20% year-over-year on average, while the AWS cloud business will grow at a 40% annual clip for the next five years. In its most recent quarter, Amazon’s retail grew a little over 25% year-over-year. AWS grew 55% year-over-year.

The RBC capital markets internet analyst then used a 10% margin for the retail business and a 40% margin for the cloud business, calling for an EPS of $82, which at 25X would value AMZN stock at $2000/share, equating to a $1 Trillion market cap.

Well, If this wasn’t bullish enough, hedge fund manager Chamath Palihapitiya believes Amazon could be worth $3 Trillion a decade from now. That’s basically a nearly 10X return in 10 years. Quoting from an earlier article on Business Insider:

Print Friendly, PDF & Email