Dear Reader,
Amazon.com, Inc., the online merchandizing and cloud computing company, is valued at 1.63 trillion USD by public markets.
I estimate Amazon is worth 1.1 trillion USD or 33 % lower than its current market valuation.
Yes, I know cloud computing has a very high net profit margin, is growing very quickly, Amazon is the leader in cloud computing and cloud computing is the future. But investors, influenced by money printing by central banks, have too lofty growth and profit expectations for Amazon as things stand at the moment.
Amazon's online merchandizing business in Europe and internationally is still loss making, despite being a relatively large portion of the Amazon's revenue overall.
Yes, Amazon's advertising business really took off and Amazon is now at third place behind Alphabet's Google and Facebook in the currently around 400 billion USD a year in revenue online advertising market.
The cloud computing business growth, however, is bound to slow down and competitors like IBM and many smaller and more agile firms are ambitious to take a larger share of the cloud computing market.
All that said, after central banks start pulling off the monetary support for the economy Amazon's market capitalization may well fall down to what I estimate is its true intrinsic value of 1.1 trillion SUD currently.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Respectfully yours,
Petar Posledovich
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