Dear Reader,
Amazon.com Inc., the online goods retailer, cloud services and internet advertising company, is valued currently at 1.65 trillion USD. This a staggering amount of money. This is roughly the GDP of Russia or the goods and services that the 146 million people that live in Russia, a nuclear superpower and a large and strong global political and economic player produce per year.
In my opinion, Amazon is overvalued currently. The real intrinsic value of Amazon is around 1.1 trillion USD at present, as far as I am concerned. However, if its cloud services business, infrastructure as a service especially, continues growing so strongly or even more quickly in the next 7 years Amazon could end up being worth 2.2 trillion USD 7 years from now. The global market for cloud services is expected to rise to 832.1 billion USD in 2025.
I expect there will be a technology stocks lead stock market crash in the next 3-4 years with the Standard and Poor's 500 falling more than 30 %, while the Nasdaq Composite could fall off a cliff by more than 50 %.
Even after such a crash, Amazon will remain valuable and in 7 years from now Amazon could recover its valuation and rise to 2.2 trillion USD. If Amazon keeps its market share of circa 30 % of the cloud business services market Amazon's cloud revenue could rise above 100 billion USD and the company could potentially realize a profit of 20 billion USD from cloud services. It should be added that now Amazon is the number three global internet advertising firm. With all that in mind a market value of Amazon of 2.2 trillion USD or even more 5 to 7 years from now does not look unrealistic at all.
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
No comments:
Post a Comment