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Amazon Stock: Here’s Why It Will Cross $2000

Posted On January 18, 2018 3:19 pm
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Amazon.com, Inc.(NASDAQ:AMZN) remains Wall Street’s favorite stock. Out of 35 famous investment firms and analysts, 34 have a strong buy rating for the e-commerce company. Recently, Morgan Stanley said in a report that Amazon stock prices will touch $2,000 a share sometime in 2018. This would push Amazon’s market cap beyond $1 trillion. Amazon has become an e-commerce juggernaut in the US, with absolutely no competitor. According to a report published by Recode last year, Amazon controls about 44% of the e-commerce market in the US.

Amazon stock has gained about 30% over the last six months. Earlier this month, Amazon said it shipped over 5 billion products in 2017 via its Prime program. Amazon’s Prime service lets subscribers get free two-day shipping for certain purchases, unlimited streaming of movies and TV shows with Prime Video.

Amazon is also increasing its grip on the smart home and virtual assistance market. The company recently said its bestselling product among Prime members in the U.S. was the Echo Dot and Fire TV Stick. Amazon Fire stick can interact and communicate with Alexa through a Voice button. This way, Amazon has created an ecosystem for smart homes, which is based on Alexa, Amazon Echo and Amazon Prime. GBH Insights analyst Daniel Ives calls this the “trifecta” of Alexa, Echo, and Prime.

Earlier this month, CNBC reported that Amazon was in talks with several big companies to allow them to place their ads in Alexa search results. This is the first time Amazon agreed to open its smart home platform to ads. Amazon’s ads revenue is poised for an explosive growth this year. Data intelligence firm eMarketer estimates that Amazon’s ads revenue will increase by 42% in 2018, to $2.4 billion. This means that advertising will become a major revenue stream for Amazon.

Amazon is already beating Google, Alibaba and JD.com in the smart speakers industry. Amazon Echo is more popular than any other smart home speaker, including Apple Home Kit and Google Home.

Amazon will keep growing because the e-commerce market is still in its growth stage. Several estimates show that more than half of shoppers in the US begin their search for products on Amazon. We can gauge the potential of Amazon from the fact that in 2016, Amazon sold more products online that Wal-Mart, Target, Best Buy, Nordstrom, Home Depot, Macy’s, Kohl’s, and Costco put together.

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