Amazon wasn’t immune to the 2022 decline in the tech industry. When the Nasdaq closed the year down by 33.47 percent, Amazon had dropped more than 50 percent of its value. It was the second-worst year in the company’s history, surpassed only by its 80 percent loss in 2000 – the year the dot-com bubble burst.
At the start of 2022, Amazon’s market cap was $1.7 trillion, making the company one of a select few ever to surpass the $1 trillion threshold. By December of that year, Amazon was valued at $834 billion.
Of course, no one doubted that Amazon (NASDAQ:AMZN) was capable of turning things around and regaining its previous value – and then some. Unlike in 2000, when e-commerce was a foreign concept to consumers, online shopping is now a large, critical, and growing component of the world economy.
Aside from that, Amazon Web Services leads the cloud computing market by a wide margin, and cloud computing is no longer a nice-to-have. It’s a must-have for any business that intends to remain competitive long-term.
So, the question isn’t whether Amazon will recover. In fact, it almost has already. Share prices are up nearly 52 percent year-to-date, and the company’s market cap is more than $1.3 trillion. The question is how high Amazon stock will go and when shareholders will see those gains. So, where will Amazon stock be in 2030?
What Percent Of Retail Is E-Commerce?
E-commerce had already entered the mainstream pre-pandemic, and the 2020-21 era accelerated its growth. As a result, Amazon’s revenue and stock price shot up in 2020 and stayed high in 2021. Of course, those gains were unsustainable, which contributed to the losses in 2022.
Nonetheless, Amazon is still growing, albeit at a slower rate, and there is no reason to believe the e-commerce business will stagnate. Consumers are still transitioning to online shopping, so there is plenty of room for expansion. At the close of 2023’s first quarter, e-commerce was only 15.1 percent of retail sales in the United States.
Worldwide, e-commerce made up 8.6 percent of total retail sales in 2016 and 18.8 percent of total retail sales in 2021. One group of researchers has projected global e-commerce sales will hit roughly 24 percent of total retail sales by 2026, and another group estimates e-commerce to grow at a compound annual growth rate (CAGR) of 13.6 percent through the end of the decade.
Amazon is leading the way in that growth. Its sites get around four times the number of shoppers as the second-leading e-commerce site. That success allowed Amazon to build an impressive warehouse and delivery infrastructure, which resulted in a wide moat. Unlike most competitors, Amazon has the size and scale to deliver merchandise almost anywhere in a matter of days.
Better still, Amazon’s reach creates a formidable network effect that competitors cannot overcome. Merchants want to get their products in front of consumers, and the best way to do that is to list on the site with the most visitors, which spells profits for Amazon and its shareholders.
Who Are The Major Players In The Cloud Computing Market?
The remarkable thing about Amazon is that e-commerce isn’t its only claim to fame. Amazon Web Services (AWS) holds 33 percent of the global cloud computing market.
Microsoft Azure is in second place with 23 percent, and Google is a distant third with 11 percent. Yes, Microsoft is gradually chipping away at Amazon’s lead, but there is plenty of cloud computing business to go around. Industry analysts project that spending on cloud computing will see a CAGR of 14.1 percent through 2030.
Aside from that, AWS is widely considered the best cloud computing platform in terms of its CIPS capabilities. In fact, AWS has been recognized as a 2022 Magic Quadrant for Cloud Infrastructure and Platform Services (CIPS) Leader – its twelfth consecutive year on the list. It is the only cloud services provider to achieve such a long streak.
In other words, Amazon has a second revenue stream that promises substantial growth – and, ultimately, substantial rewards for shareholders.
How High Will Amazon Stock Go?
As if leading the way in two growing markets wasn’t enough, Amazon is also going after digital advertising revenue. Some analysts estimate that it could get the number three spot on the list of the world’s largest advertising companies by the end of this year. Its e-commerce platform offers an unparalleled opportunity to collect consumer data, which is exactly what marketers want when developing advertising campaigns.
Finally, Amazon has no intention of letting the leadership position in new technology pass it by. The company has invested considerable resources into machine learning and Artificial Intelligence (AI), which is just beginning to enter the mainstream.
As AI capabilities continue to develop – and consumers find new and exciting applications for the technology – there is seemingly unlimited potential for growth.
If Amazon’s growth keeps pace with the growth of the industries where it leads the way – e-commerce, cloud computing, digital advertising, and AI – it will grow around 14 percent per year. That means it is not only possible but likely that Amazon will triple by 2029.
Where Will Amazon Stock Be In 2030?
In its position as one of the six public companies with a market cap over $1 trillion, Amazon is uniquely capable of developing next-generation technology. Its vast resources give it an advantage over smaller innovators because it can afford to try, fail, and try again until it has a winning product. So far, Amazon has cornered the e-commerce market, and it is far and away the winner in the cloud computing wars.
Next up, Amazon is taking on digital advertising and Artificial Intelligence. Its model for integrating AI throughout the organization suggests that anything it introduces to consumers will be simple, well-designed, and effective.
Amazon stock might not be the bargain it was in December 2022, when it hit bottom at just over $81 per share, but Amazon stock is still a buy. And there’s every reason to believe it could 3x between now and the turn of the decade. So, where will Amazon stock be in 2030? Analysts forecast that Amazon could be valued at $3.9 trillion and rise by 3x from current levels.
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