It's not every day that Amazon launches or acquires a new business. When it does, that business has a good chance of scaling into millions, if not billions, of dollars in revenue.
At times, Amazon's ability to pick winners in the tech space feels almost supernaturally prescient.
Just look at Amazon's creation of Amazon Web Services (AWS), which brought in almost $50 billion in 2020. Successful acquisitions like Zappos, Audible, or Whole Foods pulled in a combined $4.4 billion in revenue in 2020 alone. Amazon was able to integrate these businesses into its already massive e-retail infrastructure and turn it into veritable money-printing machines. Amazon's investments in entertainment allowed it to create Prime Video and Prime Music, which helps it maintain over 90% customer retention, a huge achievement given its scale.
So, yes - Amazon knows how to target the right sectors, and that's why I'm so excited about one of its newest launches. It's targeting an industry forecast to reach $1 trillion by 2035, according to McKinsey Digital.
You've got to learn about this tech before it hits its first trillion-dollar mark - and throws society 150 years into the future...
I'm talking about quantum computing. It's like science fiction made real - a whole new way of processing data that will affect almost every form of business imaginable.
It's hard to overstate the potential impact, because quantum computing tech literally changes how computers think, which opens up a whole new realm of problems for them to solve. Pharmaceutical companies are already using it to help them discover new drug therapies more effectively. Manufacturers of goods like solar panels and batteries are already using it to make the next iterations of their products more efficient.
And these are just two examples off the top of my head - the use cases are infinite, and things are just getting started.
At its core, quantum computing is light-years ahead of how classical computing works today. While I don't want to get into nitty gritty details, classical computers read binary digits, or "bits," which can either represent a 1 or 0, yes or no, on or off, etc., at any given time.
Quantum computers, on the other hand, use "qubits," which can be 0 and 1, or yes and no, etc., simultaneously. The upshot is quantum computers have the chops to process exponentially more data and solve vastly more complex problems.
Some of these machines have been clocked at 158 million times faster than today's most powerful "supercomputers" at places like Oak Ridge or Los Alamos national laboratories.
And you guessed it: Amazon is now offering a new service to enterprise-level customers, called Braket. They're running it out of AWS, and it lets clients access quantum computing Cloud services. In the Cloud, you can build algorithms, test them, run them, and analyze the data all in one place. Not only that, but Amazon offers different types of quantum hardware including trapped ion, superconducting, and annealing devices.
There are already big customers using this service right out the gate: Volkswagen Group, Amgen, and even Goldman Sachs. Werner Vogels, chief technology officer at Amazon, is so excited about this new business that he decided not to retire.
Amazon also recently announced the opening of the AWS Center for Quantum Computing, which will be the home of AWS Quantum Technologies. This represents a serious investment and is an indicator that Amazon in this for the long haul, playing for keeps.
That means that companies at the forefront of this space, that are building the hardware and software for the future of quantum computing, are going to be working hand in glove with Amazon for the foreseeable future.
The revenue is already impressive, to put it mildly... but the potential is staggering - almost incomprehensible. New quantum computing technology could generate $8 trillion in new wealth by the time it's all said and done.
There are a couple of things investors can do about this...
Now, I've recommended AMZN shares before, several times. I've often been among the first to project more growth for them, even when other analysts are starting to cool off on Amazon.
Obviously, that recommendation is still good - better than good, in fact. If you can't buy full shares of Amazon, see if your platform will let you own fractional shares.
There are, however, even more direct quantum computing plays on this $8 trillion mega-trend - and they're nowhere near as expensive as Amazon's $3,000-plus sticker price. I've picked out a company powering quantum computing services globally, and you can get details right here.
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