Amazon (AMZN - Get Report) could beat the iPhone maker to the punch in the race to become the first $1 trillion market cap company, according to JPMorgan analyst Doug Anmuth. Anmuth didn't specify how long he thought it would take for Amazon to reach the mark, but he noted that the main catalysts could be the company's juggernaut e-commerce business and growing cloud segment.
"In our view, Amazon is investing in more growth opportunities than any other company we cover," Anmuth wrote in a note to clients on Wednesday.
Shares of Amazon outperformed every other FAANG name -- Facebook (FB - Get Report) , Apple, Netflix (NFLX - Get Report) and Alphabet (GOOGL - Get Report) -- in 2017, rising by 56%. That's more than double the S&P 500's 19% increase in 2017. The company's market cap currently stands at just over $604 billion, propelled by powerhouse earnings and general optimism around mega-cap tech names. Apple currently is the market cap leader at $887 billion, while Alphabet clocks in at $771 billion and Facebook at $546 billion.
Amazon's stock closed up 0.1% to $1,254.33 on Wednesday.
Amazon's outsized gains are unlikely to diminish in 2018, Anmuth noted. This year, Amazon could benefit from its revenue mix shifting to include sales from third-party sellers on its e-commerce platform, as well as major growth in its Amazon Web Services cloud segment and advertising business. The Prime subscription network, often referred to as Amazon's crown jewel, should also boost revenue as it creates a flywheel effect when combined with new synergies from the integration of Whole Foods Market.
Anmuth estimates that Amazon racked up a total of 95,000 global Prime subscribers by the end of 2017, up from 71,000 in 2016. Amazon doesn't disclose the total number of Prime subscribers, but it did say that more new paid members joined Prime worldwide in 2017 than any other year.
"We believe Amazon has plenty of room for additional Prime member growth, especially in international markets," he explained.
Amazon Prime is currently offered in 16 countries, with newer areas including Mexico, the Netherlands, Luxembourg and Singapore being added in 2017. Recently, it has turned its focus to high-growth areas such as India and South Korea, though it will likely face stiff competition in those places from local rivals. Amazon has also dialed back some of its operations in China due to strict government regulations.
Aside from Prime subscribers, Anmuth said he remains most bullish on Amazon's advertising business, which he said could become a "third scaled digital ad platform" to rival Google and Facebook's digital ad duopoly. With revenue of roughly $2.8 billion in 2017, Amazon's ad business comprises just 2% of its total revenue, but it could more than triple to roughly $9 billion by 2019, he added.
"While the big keep getting bigger as platform scale drives marketing dollars, we believe advertisers and agencies would welcome a third scaled digital player," Anmuth explained. "Amazon is best positioned in our view, with its in-market customers, scale, strong access to data, shopping history, ability to close the loop, & leading market share in smart home speakers with Alexa/Echo."
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