When it comes to e-commerce giants, the name Amazon (AMZN) is almost universally known. This company, which started as an online bookstore, has now grown into the world’s largest retailer, recently surpassing Walmart in sales to claim the crown of the retail industry. However, this is merely the tip of the iceberg of its business empire. Amazon also holds leading positions in digital advertising and cloud computing, making it a “three-pronged” giant.
Among its many businesses, Amazon Web Services (AWS) has long been hailed as the “jewel in the crown.” This division not only contributes a significant portion of the company’s revenue but also serves as its primary source of profit. CEO Andy Jassy’s recent remarks have both astonished investors and provided crucial guidance for the company’s development over the next five years.
During an all-hands meeting earlier this week, Jassy shared his latest assessment of AWS’s growth prospects. He noted that before the advent of the AI wave, he had originally anticipated AWS achieving $300 billion in annual revenue over the next decade. However, the seemingly insatiable market demand for AI-related tools and services has completely reshaped his outlook. “Given everything that’s going on in AI, I think it’s likely that we have the opportunity to at least double that,” Jassy said. In short, he now believes AWS has the potential to reach an annual revenue run rate of $600 billion.
Regarding Amazon’s plan to invest $200 billion in capital expenditures over the next year, Jassy also downplayed external concerns. He emphasized, “We are installing cloud service capacity and monetizing it as quickly as we can.” In other words, Amazon is actively expanding its data center infrastructure to meet existing real market demand—a situation that has made its peers envious.
If Amazon can truly achieve the $600 billion target proposed by Jassy, it would carry significant implications for investors. Let’s calculate based on this expectation: In 2025, AWS’s revenue stood at $128.7 billion, a 20% year-over-year increase. To reach the $600 billion target, the cloud business would need to achieve a compound annual growth rate of approximately 17% over the next several years. If growth follows this trajectory, AWS’s revenue would reach around $282 billion by 2030.
Meanwhile, Amazon’s e-commerce business (North America and International segments) has maintained an annual revenue growth rate of about 10% over the past three years. Assuming a conservative growth rate of 8% over the next five years, its e-commerce revenue would grow from $588 billion in 2025 to $864 billion in 2030. Combined, Amazon’s total revenue would reach approximately $1.15 trillion by then.
Currently, Amazon’s market capitalization stands at approximately $2.22 trillion, with a price-to-sales ratio of about 3x, in line with its average over the past three years. If the price-to-sales ratio remains unchanged and the company achieves its $1.15 trillion revenue target, its stock price could rise 61% to $338 per share, pushing its market capitalization to approximately $3.59 trillion.
It is worth noting that this is merely a projection based on existing data. The actual development process could face numerous variables, such as economic downturns, geopolitical conflicts, or high inflation. Of course, Amazon’s performance could also exceed expectations and achieve even higher growth. Regardless, its clear development trajectory is already evident. Currently, Amazon’s price-to-earnings ratio is less than 29x, which appears quite attractive given its leadership positions in digital retail, cloud computing, and digital advertising.
