Jefferies Says Amazon Will Be Worth This Much in 4 Years

According to Jefferies, who has a buy rating on Amazon shares, the company is heading to be a trillion dollar company in the next four years.

Jefferies has predicted that Amazon’s ad business sales will explode over the next five years and analyst Brent Thill with the firm said in a note on Tuesday, “We think advertising could become Amazon’s most profitable revenue stream and similar to AWS [Amazon Web Services] afford opportunities to invest back into the core biz.”

Thill remarked, “We forecast Amazon reaching $1 trillion in market cap by 2022.”

According to Thill, the e-commerce giant’s business will see a growth in sales of 43% per year and reach $22 billion in revenue by 2022. Compare that to $4 billion this year. Thill says that consumers are using Amazon for over 50% of all product searches in the U.S.

He continued, “We believe [ad business] will create halo effects for the core eCommerce business as it creates greater tie-ins to brands. Amazon could differentiate itself by leveraging an advertiser’s dream of data – billions of touch points with real sales data for attribution.”

The analyst has raised his price target on the stock from $1,750 to $1,850.

Disclaimer: We have no position in Amazon.com, Inc. (NASDAQ: AMZN) and have not been compensated for this article.