Shares of Amazon.com Inc. (NASDAQ: AMZN) retreated 1.8% on Monday, and they are down 7.0% in the past five days. Compared to a year ago, the stock is 21.6% higher, narrowly outperforming the Nasdaq in that time.
During its fourth-quarter 2024 earnings call on Feb. 6, Amazon announced that its advertising revenue surged to $17.3 billion as Thursday Night Football set streaming records by averaging 13.7 million viewers. That ad revenue represented 18% quarter-over-quarter growth. Additional revenue drivers included strong retail holiday spending and AI services through AWS, the largest cloud provider in the world.
On Feb. 4, Amazon shares hit its all-time high of $242.52. Over the past five years, the e-commerce giant has posted a gain of 125.8%. In January, the stock jumped when Raymond James increased its price target from $230 to $260. That follows a similar increase from BMO Capital Markets, which on Jan. 17 increased its price target for Amazon stock from $236 to $265 with an Outperform rating. Citigroup, Goldman Sachs, Wells Fargo, and many others maintained Buy-equivalent ratings after the fourth-quarter report.
Outside of Nvidia Corp. (NASDAQ: NVDA), Amazon has been a Wall Street darling since the company’s initial public offering in May 1997 at a split-adjusted price of $0.07. Today, Amazon trades for about $213, meaning the stock is up more than 9,700% since January 2005. However, the only thing that matters from this point on is what the stock will do for the next one, five, and 10 years and beyond.
Let’s crunch the numbers and give you our best guess about Amazon’s future share price. No one has a crystal ball, and even the Wall Street “experts” are often wrong more than they are right in predicting future stock prices. We will walk through our assumptions and provide you with the story around the numbers (other sites just pick a share price without explaining why they suggest the price they do).
Here’s a table summarizing performance in share price, revenues, and profits (net income) from 2014 to 2017.
*Revenue and net income in billions
From 2014 to 2024, Amazon’s revenue grew by 616.80%. The ride up wasn’t always smooth, however. For example, in 2020, sales jumped 38%, and net income nearly doubled. 2021 saw a continued boom as people moved to e-commerce shopping during Covid. However, all those sales being “pulled forward” led to challenges in 2022, and the company swung to a surprise loss. As Amazon embarks into the back half of the decade, a few different key areas will determine its performance.
The current consensus one-year price target for Amazon stock is $266.48, which is about 25.4% upside from the latest closing price. All but four of 69 analysts covering Amazon recommend buying shares, 18 of them with Strong Buy ratings.
24/7 Wall St.’s 12-month forecast projects Amazon’s stock price to be $226.50. We see AWS continuing its current 12% growth rate but see Amazon’s advertising business outperforming analysts’ expectations.
Add all these numbers up and take out some amount for “new bets” the company will surely be investing in (and a potential dividend boost) and we see revenue in 2030 at $1.15 trillion and $131 billion in net income. Today, the company trades for about 50X earnings, which we’ll take down to 35 times as the company matures (but continues showing growth). In our analysis, Amazon is worth $2.6 trillion in 2030. Here are our revenue, net income, and company size estimates through 2030:
*Revenue and net income reported in billions and TEV in trillions
Amazon to Pass Walmart and Become America’s Largest Company
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
1 https://www.fdic.gov/national-rates-and-rate-caps
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Financial Market Newsflash
No financial news published today. Check back later.
