This Analyst Explains Why He Sees Amazon's Cloud Unit Reaching A Valuation Of $3T

  • Redburn Ltd analyst sees Amazon.com, Inc AMZN Amazon Web Services poised for a $3 trillion value, almost triple Amazon's present worth.
  • Alex Haissl considers Amazon's cloud unit potent enough to split it from the massive, slower-growing online retail operation lest the latter fail to recover.
  • He did not offer any timeline for reaching the $3 trillion mark.
  • Haissl recommended a Buy on the stock with a $270 price target implying an upside of 150%.
  • He saw AWS as better positioned than rivals run by Microsoft Corp MSFT and Alphabet Inc GOOG GOOGL due to lower costs and better technology. 
  • AWS accounts for less than 20% of Amazon's revenue but will contribute all of its earnings this year, as per Haissl.
  • AWS' revenue jumped 37% to $18.4 billion in the first quarter, even as the company's core e-commerce business saw a decline in sales.
  • "There is no sugar-coating the weak performance" of online retail, he said, adding that "we do not think the business is structurally broken." 
  • Haissl rated Microsoft a Buy, Snowflake Inc SNOW as Neutral, and has a Sell on MongoDB Inc MDB.
  • Price Action: AMZN shares traded lower by 0.17% at $107.58 in the premarket on the last check Wednesday.
  • Photo by Tony Webster via Flickr

Posted In: BriefsNewsTech

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