generic Amazon: A Cloud Leader With Plenty More Room to Run
Amazon (AMZN) kicked off its 9th annual AWS (Amazon Web Services) re:Invent conference on Monday with a keynote speech by AWS CEO Andy Jassy.
As the event was virtual, RBC analyst Mark Mahaney logged in to get the lowdown and logged out “incrementally positive about the opportunity given AWS’s immense scale, market leadership, continued customer obsession, and the level of depth and breadth of AWS products and features.”
The 5-star analyst notes several key takeaways and highlights how impressive AWS’ evolution has been over its 15-year existence.
With an annual run-rate of $46 billion - in Q320 revenue increased by 29% year-over-year - AWS “is the clear leader in the Cloud Infrastructure as a Service (IaaS) and Platform as a Service (Paas) market.” It is so far ahead of the competition, that according to research firm Gartner, its ownership of 45% of the global cloud computing market is bigger than all its closest rivals’ share combined - Azure with 18%, Alibaba has 9%, Google holds 5% and IBM at 2%.
Not only that, over the years, the growth has accelerated. ”It took AWS 123 months to get to $10B in annual revenue, 23 months from $10B to $20B, 13 months from $20B to $30B and 12 months from $30 to $40B this year,” Mahaney noted.
Interestingly though, there is still much room left to run. Cloud penetration only makes up 4% of the $1 trillion+ IT market.
Mahaney also highlights one of the speech’s key themes. Jassy touched on the necessity for reinvention. Most Fortune 500 companies don’t keep their place at the top unless they constantly reinvent themselves, Jassy said. Reinvention takes place by fostering the “right culture and the right technology.”
Talking of reinvention, AWS will also launch a string of new products and features during the 3-week conference. Jassy highlighted 24 of these during his speech including products focused on support for machine learning, new offerings to bring cloud container capabilities on premises and several innovative storage solutions.
Overall, Mahaney rates AMZN an Outperform (i.e. Buy) alongside a $3,800 price target, which implies a 20% upside from current levels. (To watch Mahaney’s track record, click here)
Amongst Mahaney’s colleagues, barring 1 Hold, all other 36 recent reviews rate Amazon a Buy. A $3,819.89 average price target accompanies the Strong Buy consensus rating, implying ~20% upside in the year ahead. (See AMZN stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
