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Amazon.com Inc. (Nasdaq: AMZN) became the world's second trillion-dollar company on Sept. 4, 2018, when shares pushed through the $2,050.27 needed to make it happen.
But I think it'll be the world's first $2 trillion player.
Here's why and, of course, how to play along for maximum profit potential...
Four Critical Segments Will Propel Amazon to $2 Trillion
Unbelievably, many investors still think of Amazon as a "shopping" company.
I get it – my family and I seem to single-handedly support the company's shopping revenues. And, like many people, I'm saying that only halfway in jest!
But Team Bezos is much more than that, and the fact that most investors can't see beyond the packing tape is a huge opportunity for you to jump in... before the markets recognize the profit potential we're about to discuss.
Amazon Critical Segment No. 1: Artificial Intelligence
Many analysts believe that the single biggest driver will be Amazon Web Services (AWS), but I believe the real value creator is artificial intelligence (AI) led by – you guessed it – Alexa.
If you're not yet familiar with Alexa, you will be.
Amazon's Alexa is a digital personal assistant of sorts that resides within the Amazon Echo and Echo Dot smart speakers, developed in Amazon's Lab126. You can ask Alexa questions, ask "her" to dim your lights, or stream music. Shortly, there will be a whole lot more as the number of connected devices grows.
And it WILL grow! Voice-driven technology is going to be an $18 billion market in under five years, according to Markets and Markets, but I think that is far too conservative. $30 billion is probably far more likely.
That's because Alexa learns from everything it hears.
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I know it's not supposed to be listening to everything you say but... puuuullllllleeeeease.
Alexa is learning even if you don't talk to it... about your habits, about your home, about your speech patterns, about connected devices. And that information, in turn, is rapidly being spread to other parts of the company, not the least of which are Amazon Go stores, Prime, and, of course, AWS.
In fact, the related patent filed in June 2017 tells you this is coming.
Quote... "if a user mentions a desire to travel to Paris while on a [phone] call, a recommendation for a book about Paris or an advertisement for a travel site might be presented at the end of the call."
Another section of the patent application references restaurants and couponing, noting specifically that "providing such information after the call might be too late if the user makes other plans during the conversation."
But here's the clincher... "in either case, the information can be stored for use in subsequent recommendations."
I think there's a good case to be made that Amazon's entire AI effort is being driven by the idea that they're going to use what they learn to immediately hook you into spending by subtly capturing and – if need be – altering your behavior.
This seems far-fetched, but I've already had it happen to me.
My wife and I were talking about attending the Monaco F1 races... in Japanese from our home in Washington. Less than five minutes later, we had an advertisement served up in Japanese for French travel with sub advertising related to F1!!
Yeesh!
Amazon Critical Segment No. 2: Amazon Web Services
This is the segment that allows Amazon to dominate every other business segment it enters because of the related cash flow it kicks off.
People don't realize this, but AWS launched just more than a decade ago and now enjoys roughly 34% market share of the cloud infrastructure market, according to Synergy Research Group.
That means it is bigger and controls more traffic than the next four competitors combined.
Most analysts brush this off, but that's a very expensive mistake.
Team Bezos will generate something on the order of $25 billion within the next 12 months from cloud-related businesses. That's a trajectory of nearly 50% growth, accounting for 65% of total operating income.
Amazon Critical Segment No. 3: Classic Industry Disruption
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.
That is true!