The board is set, the pieces are moving! Amazon stock price is all set to soar past the magical $1,000 mark, according to analysts, with AWS being at the center of this success.
The company is currently trading at 21 times its book value, but investors are still willing to pay the premium for the stock.
As noted, Amazon saw a gain of 25% in 2017, which many believe is the start. AWS is the uncrowned king here, the company’s cloud business. Amazon Web Services currently adds 12% of the total revenue for Amazon, with an operating margin of roughly 30%.
This, obviously, puts AWS in a more profitable position than other segments retail and ecommerce.
Industry experts estimate that the cloud computing business will grow 18% this year, with market research firm Gartner expecting worldwide revenues to come in at an astounding $246.8 billion, with the highest growth in this sector coming from IaaS.
Or Infrastructure as a Service, something that AWS pioneered.
The company may be facing sustained competition from other cloud providers like Google, Microsoft, IBM, Salesforce, Joynet, CenturyLink, Rackspace and Verizon Terremark, it holds a 40% global market share with AWS.
In fact, with the total cloud market expected to increase to $383 billion over the next few years, it puts the Amazon Web Services in an astounding position as a leader in this domain.
The report above has the DCF and earnings model show that Amazon stock price is on its way to breaking through $1,000, as more and more companies undergo a change from physical to digital in order to stay competitive.