A sum-of-the-parts analysis from Jefferies analyst Brent Thill has predicted that Amazon is on its way to become a $1 trillion dollar company by 2022. In the next four years, the world’s largest retailer is expected to grow almost one-third its current size to have a 29 percent jump from Monday’s valuation of $773.8 billion.
Amazon’s current net worth is greater than the combined market value of Walmart Inc. and Alibaba Group Holding Ltd; the next big retailers after Amazon. Thill has suggested various avenues of expansion for Amazon, the leading among which is its advertising business. The shift in ad spending to online platforms has already helped Amazon to expand its business without having to compete with Facebook Inc. or Alphabet Inc.’s Google. The “billions of touch points with consumers” that Amazon boasts of distinguishes it from other ad markets and may help its current $4 billion ad revenues up to $22 billion by 2022.
Compared to an average target of $1,701, as per data compiled by Bloomberg, Thill has rated the stock a buy by raising his 12-month price target to $1,850 from $1,750. However, Amazon may hit the $1 trillion target sooner than expected as Analysts from Wolfe Research and Monness, Crespi, Hardt & Co. both carry price targets of $2,000, putting Amazon just shy of the trillion-dollar mark within a year based on the current number of shares outstanding.