According to Redburn analyst Alex Haissl, Amazon.com Cloud Unit, Amazon Web Services is heading for a value of US$3 trillion. However, the analyst does not say when the value of US$3 trillion will be reached.
Due to the size of the unit, Haissl said, the company will eventually be forced to spin it off from the larger online retail operation.
“Separating AWS may not be on the table for now, but if the performance gap versus the non-AWS parts continues to widen, it could be on the table further down the road,” wrote Haissl, former head of automotive research at Berenberg.
Haissl recommend buying Amazon shares, as the stock is expected to reach US$270 next year. Other valuable shares to buy include Microsoft. He recommends Snowflake as neutral and a sell on MongoDB.
In a 128-page report on the cloud computing industry, Haissl said Amazon’s cloud unit was better positioned than other rivals for a number of reasons, including lower costs and better technology.
While Amazon Web Services make up less than 20% of Amazon’s revenue, Haissl writes that the unit will contribute all of its profits this year.
The sources for this piece include an article in Bloomberg.