Ever since Jeff Bezos started Amazon (NASDAQ:AMZN) as an online book retailer in 1994, people have doubted the company’s long-term success.
Today, Amazon owns the third highest market cap in the world, but few would argue that it is the most valuable brand and nobody would bat an eye if it overtook Apple (NASDAQ:AAPL) at some point in the future.
But for new investors, is Amazon stock a buy after all of these years? Or have you missed the boat on one of the greatest investments in the history of the stock market? Here’s everything investors need to know about the Amazon stock forecast over the next 5 years.
Wallstreet remains Bullish on the Amazon Stock Forecast
The first thing inexperienced investors will do is look at Amazon’s daunting share price and not even consider it as an investable stock. Trust me when I say, investors have been doing that with Amazon since it was an unprofitable company trading for a few hundred dollars per share.
If you invested in Amazon a decade ago, the stock would have returned over 1,700%. Share price should never be what determines if a stock is expensive or not.
Nevertheless, Amazon retains its position as one of the most upgraded stocks on Wallstreet. Remarkably, across the board of 42 Wallstreet analysts all 42 have currently listed a Buy rating on Amazon. JP Morgan analyst Doug Anmuth currently holds one of the streets highest price targets of $4,600 representing an upside of 25%.
Anmuth noted that Amazon’s gross merchandise volume excluding its physical stores will climb to $377 billion this year and reach $457 billion in 2022 which would surpass Wallmarts U.S sales.
Evercore analyst confident in long term outlook for AMZN stock
Earlier this month, Evercore ISI analyst Mark Mahaney raised the firm’s price target on Amazon.com to $4,700, suggesting a 30% upside. Mahaney noted that investors “under-appreciate the magnitude and meaning of Amazon’s dramatic fulfilment capacity expansion” according to theFly.
The analyst believes the companies strong delivery network will continue to strengthen Amazon’s customer proposition and the long term outlook on the stock.
Goldman Sachs sees 15% growth rate over the next few years
Another Wallstreet analyst, Eric Sheridan from Goldman Sachs initiated coverage of with a Buy rating and $4,250 price target. The analyst noted the industry Amazon operates in still has “ample opportunities” for secular revenue growth. Sheridan sees Amazon as a long term play for internet investors. Furthermore, the analyst added that Amazon can sustain 15% plus growth rate over the coming years.
Amazon revenue to double by 2025
According to S&P Global Market Intelligence data, analysts expect Amazon revenue to jump to $821 Billion by 2025. To put this growth into perspective, analysts are expecting Amazon to generate $476.32 Billion for 2021. As a Blue Chip company, revenue growth at these levels are much rarer as companies enter a maturity stage of declining growth. However, Amazon continues to outperform its competition with high end CAGR’s and a strong outlook according to analysts.
Is Amazon stock the same without Bezos?
First of all, Amazon isn’t really without Bezos anymore. He’s promoted himself to the role of Executive Chairman while Andy Jassy resumes the role of CEO. Amazon revolutionized the global retail business and changed the way we think about eCommerce forever.
Think about how disappointing it is when you order something from another site and next day shipping isn’t an option.
But the future of Amazon arguably lies in the Amazon Web Services Cloud segment (AWS) of its business. No matter how big Amazon scales its eCommerce business to be, it simply cannot compete with the rapid growth and low margins of AWS.
Last quarter, AWS already accounted for 12% of the company’s total revenues, and many on Wall Street would value AWS at over $500 billion if it were spun off into a separate entity.
So when AWS soon becomes Amazon’s largest money maker, who better to lead the company than the founder and creator of AWS: Andy Jassy.
The bottom line – Amazon Stock Forecast 2025
In summary, Amazon continues to outperform with Wallstreet analysts maintaining a very strong bullish outlook on the stock. In addition, analysts see Amazon revenue continuing to compound at a high growth rate over the next 5 years.
However, Amazon sales were lower than expected in Q2 with online sales lower due to a return in shopping centre foot traffic. We will see over the next quarter if this trend continues or if Amazon sales can bounce back.
Overall, the general consensus points towards strong revenue growth over the next 5 years, even with Jeff Bezo’s out of the picture.
The information above is not financial advice and does not constitute as a recommendation. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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