Amazon Poised to Outpace Peers as Cloud Growth Accelerates
The 'Magnificent Seven' tech companies include Amazon, Alphabet, Apple, Microsoft, Meta Platforms, Nvidia, and Tesla. Among them, one stock has a high chance of doubling by the end of 2028: Amazon.
Amazon's cloud computing division, Amazon Web Services (AWS), is booming due to the AI boom. Revenue grew 37% year over year last quarter and hit $148.4 billion over the last 12 months. AWS likely has a path to doubling by 2028, driven by massive spending plans from AI start-ups.
Amazon also benefits from its e-commerce platform, consumer electronics, and other services such as Amazon Prime subscriptions and advertising. The North America and International segments now account for $627 billion in retail revenue. In the next few years, there should be continued growth from e-commerce taking share in markets around the world, along with margin expansion due to economies of scale.
Amazon's shares look cheap, especially when considering its Anthropic investment. Assuming a market cap of $2.7 trillion and an earnings multiple of 27x trailing EBIT, Amazon stock can close to double by the end of 2028.