Where will Amazon.com be in 10 years? – The crazy fool

It's hard to predict what Amazon.com (NASDAQ: AMZN) It will look like a decade, because it has been unpredictable in its history and is still looking for the next big adventure in which to embark.

Over the years, Amazon has gone from selling books to traditional selling to sell almost everything under the sun and offer a multitude of additional services, including free delivery, same-day delivery, streaming videos, smart home devices and cloud storage. .

And as no one predicted 10 years ago that Amazon would become the world's largest cloud provider, or that it would open physical bookstores or offer customers innovative ways to shop without cashiers (stores). Amazon Go), there is a good chance that Amazon will continue in 10 years a growth opportunity that no one even speaks for the moment.

Although we can not know for sure what Amazon will look like in 2029, it makes sense for investors to look at some of the key areas of society.

Extend international reach

Amazon is the largest e-commerce platform in the United States, with an estimated 49% of online sales, according to eMarketer. It's on the pace of eclipse Walmart As the largest clothing retailer in the United States, Amazon also aims to dominate the grocery market.

Although Amazon already has a huge size considering its $ 233 billion in annual revenue, there are still many places in the world where Amazon has not yet penetrated. International sales represent about 28% of the company's total revenues, and the largest market outside of North America is Germany.

Still, Amazon is likely to face some of the growing international challenges over the next decade. In China, where Amazon represents less than 1% of online sales, Ali Baba has a hold on the market. In India, where Amazon has invested heavily, Amazon has encountered an obstacle in the form of new government e-commerce and anti-monopolies policies that force foreign competitors to compete more with the quality of service than they do. at prices.

In other places, Amazon is just starting to get wet. Last year, Amazon began to expand in Brazil and has just opened its first e-commerce store in Turkey. Amazon has generally managed its international operations at a loss, but this is telling the Amazon gap. It takes billions of dollars to build the infrastructure in these countries, let alone navigate through complex laws and regulatory environments. There are not many companies in the world, with the exception maybe of Walmart, who have the capital and the patience to lose money for several years while building the balance needed to make a profit.

Advertising explodes

Another exciting opportunity for Amazon is its booming advertising business. Amazon allows other companies to market their products on Amazon's product listing pages and generates billions of dollars in revenue. More people are starting their online hunt for a product on Amazon as opposed to AlphabetGoogle, for example. This is very appealing to advertisers because they know that their articles are immediately under the eyes of those who are already in a shopping state of mind when they browse the products listed on Amazon.

Although Amazon does not disclose advertising revenues in particular, its "other" revenues, which mainly include advertising revenues, increased by 117% to $ 10.1 billion in Amazon are growing at a faster rate than Facebookand Alphabet. It is estimated that by 2020, the advertising sector of Amazon will reach $ 15 billion, eMarketer expects this to be done at the expense of Google's digital advertising. .

On the cloud

While Amazon's core retail business will continue to grow worldwide, investors need to stay alert to Amazon's cloud-based business, Amazon Web Services (AWS). AWS helps companies connect and evolve a multitude of services and systems in the cloud, including machine learning, blockchain, storage, hosting of database systems, tools and services. Analysis and business applications.

AWS revenues have more than doubled to $ 25.7 billion in recent years. It was estimated that Amazon held 52% of the public cloud services market in 2017, according to research firm Gartner.

In addition, AWS contributed nearly 59 percent of Amazon 's total operating profit last year. An analyst at MKM Partners believes that AWS alone could rise to $ 1 trillion by 2024, which is greater than Amazon's current market value of $ 871 billion (total number of shares outstanding). circulation multiplied by the share price).

Amazon 2029

Over the next decade, you can expect Amazon to continue to make progress on the international stage, to penetrate trade slots and help more people migrate to a digital economy. Opportunities in the domestic market are also numerous, as e-commerce sales represent less than 10% of US retail sales.

International, advertising and AWS are key growth assets, but CEO, Jeff Bezos, never fails to provide insight into the direction of the company. Amazon is currently seeking outlets in non-retail sectors, such as the $ 135 billion video gaming industry and the $ 3 trillion healthcare industry. It is likely that the company will be very different in 10 years. But that's what makes Amazon one of the most dynamic companies in the world and why it's an excellent stock of growth to put in your nest egg.