Amazon shares went past the $2,000 milestone for the first time on Thursday (Aug. 30) after another analyst raised his price target for the eCommerce giant.
According to MarketWatch, that new target is more than what is needed to give the company a market capitalization of $1 trillion. On Thursday, the stock went up as much as 1.4 percent to an all-time intraday high of $2,025.57 earlier in the day, before those gains were trimmed slightly to be up 0.3 percent in afternoon trade.
Amazon is set to become the second company to top $1 trillion in market cap if its stock rises to at least $2,050.27. Earlier this month, Apple became the first company trading in the U.S. to have a market capitalization of more than $1 trillion.
But Amazon is close behind. Analyst Greg Melich at MoffettNathanson raised his stock price target for the company to $2,100, which is 4.7 percent above current levels. In his research note, Melich pinpointed the potential of Amazon’s cloud business, Amazon Web Services (AWS), to gain market share and expand profitability. Just last week, another analyst predicted that Amazon’s value could explode due to the success of AWS.
“We are often asked, is Amazon a retailer, a tech company or a budding media juggernaut? The answer is all of the above,” Melich wrote in a note to clients.
He added that Amazon’s retail business is $1,200 of his valuation of the stock price, while AWS accounts for about $900. Melich is the 31st of the 47 analysts surveyed by FactSet to predict a trillion-dollar market cap for Amazon.
“As Amazon approaches that [$1 trillion] milestone, their market cap could exceed 5 percent of [gross domestic product],” Melich wrote. “If society decides Amazon is too big, the off ramp could be splitting AWS from Amazon Retail. Given the distinct business that it is quickly becoming, it might prove positive for shareholders and society.”