The high-return cloud business should help Amazon to increase its market capitalization up to 2.5 trln dollars by 2024.

MKM Partners experts recently reported such forecast, finance.ua reports.

According to the estimates of MKM Partners analyst Rob Sanderson, in six years, the cost of one cloud unit Amazon Web Services (AWS) may reach 1 trln dollars. It is more than the current market capitalization of the whole Amazon, which is now 929 bln dollars.

In early August 2018, Apple corporation became the first public company in U.S., the market capitalization of which exceeded 1 trln dollars. Amazon also tries to reach this benchmark.

“We still consider that Amazon stocks is the best long-term investment, which is available for investors nowadays”, the specialist wrote in the analytical note. He also increased the price target on corporate securities from 1,840 to 2,215 USD per stock.

Along with the revenue increase in cloud business, Sanderson anticipates the business growth in online trade, which Amazon actively expanded in 2016 and 2017. In addition, the company’s investments in sale and delivery of fresh food products should also make return. In 2017, Amazon invested 13.4 bln dollars in this business, purchasing the food store chain Whole Foods.

Sanderson considers that by 2025, Amazon will control 14.5% of U.S. retail market and will outperform Walmart, the today’s largest retail chain in North America.

Regarding AWS cloud business, according to MKM Partners forecasts, its operating margin will be 35% in 2024. For comparison, in Q2, 2018, the indicator was 26.9%, and the previous maximum of 28.5^ was registered in later 2015. If Sanderson’s predictions come true, then by 2025, almost the third of the aggregate Amazon’s return, which will increase to 88 bln dollars by this time, will fall to AWS share.

However, with all the optimism of assessments, the specialist anticipates that in 2019, the AWS growth rate will become moderate and decrease to 37% versus the forecast level of 46% for this year.

According to the data of Synergy Research analysts, Amazon Web Services is leading on the market of services for expanding the cloud infrastructure, including Iaas and Paas public solution as well as managed private clouds. In Q2, 2018, the cloud return of AWS outperformed four closest rivals, taken together. However, the rivals Microsoft, Google and Alibaba demonstrate higher growth rates and strengthen their positions.