Amazon Stock May Double by 2028 on Cloud Growth and E-Commerce Expansion

Amazon's cloud computing division, Amazon Web Services (AWS), has seen significant growth due to the AI boom. Its revenue grew 37% year over year last quarter and hit $148.4 billion over the last 12 months.

The company has a massive backlog of spending plans from AI start-ups, which should lead to further revenue growth. With profit margins already at 37%, AWS could reach segment profits of $100 billion if its revenue grows to $300 billion, even if margins slip back to 30%.

Amazon's e-commerce platform also saw strong growth in the last quarter, with a 15% increase in retail revenue. The company expects continued margin expansion due to economies of scale and the implementation of new technologies such as faster delivery times, warehouse robotics, and self-driving vehicles.

With a market cap of $2.7 trillion, Amazon trades at around 27x its trailing EBIT. If this earnings multiple remains in 2028, then Amazon stock can close to double by the end of that year.