RBC Capital Reiterates Outperform Rating on Amazon.com (AMZN) Following Day 1 of All Virtual re:Invent Conference
RBC analyst Mark Mahaney has remained positive on the outlook for Amazon’s (NASDAQ: AMZN) AWS after participating in the 9th annual “re:Invent” event.
The company remains a “clear leader” in the Cloud Infrastructure as a Service (IaaS) and Platform as a Service (Paas) market, Mahaney writes in today’s research note sent to clients.
“Of note is how AWS’s rate of growth has accelerated over the years—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. This $10B in incremental revenue for AWS over the past 12 months comes with an already high base of $30B in revenue, which shows the company’s ongoing leadership and growth in Cloud Computing.”
AWS’s worldwide market segment share is currently standing at 45%, which is more than double compared to the second-placed Azure at 18%.
“We believe that the massive opportunity ($1T+) in an underpenetrated IT market (4% cloud penetration vs. 96% on premise), AWS’s customer obsession, its depth and breadth of product offerings, and its scale, will enable AWS to maintain a leadership position for the foreseeable future.”
During the first day of re:Invent, Andy Jassy, CEO of AWS, said that the pandemic has accelerated cloud adoption by several years.
“AWS currently offers the most depth and breadth of product features and capabilities available in the Cloud market today, across compute, storage, analytics, IoT, and machine learning, to name a few. AWS offers more tools and capabilities than any other Cloud service provider, it continues to innovate at a fast clip, and benefits from operational performance maturity and scale from its 6 year head start,” Mahaney wrote.
Speaking about the importance of reinventing on regular basis, Jassy said that Fortune 500 companies are generally struggling to stay in the top unless they’re able to reinvent themselves regularly. In this space, it’s important to reinvent early and not wait for desperate times, according to Jassy, who added that the right culture and the right technology are required to reinvent.
Mahaney rates AMZN as “Outperform”, with a price target of $3,800 per share.
For an analyst ratings summary and ratings history on Amazon.com click here. For more ratings news on Amazon.com click here.
Shares of Amazon.com closed at $3220.00 yesterday.