Analysts Suggest that AWS is Worth $50B
Never mind the multi-billion dollar e-commerce platform that Amazon has built over the past couple decades. Analysts at Robert W. Baird mention that their calculations show Amazon Web Services being worth anywhere from 40 to 50 billion dollars. At this point in time, it is currently unknown how much revenue is generated from AWS. Because of the way Amazon reports their revenues, AWS revenues are not segmented out of the general Amazon revenue pool.
All of that changes this year as Amazon has promised its investors that AWS numbers will be segregated from Amazon’s ecommerce sales. Previously, AWS revenues were listed under a column called “Other” under its listing for North American sales. With AWS numbers now being clearly reported, cloud enthusiasts will be able to put a monetary value on the AWS infrastructure.
The analysts at Robert W. Baird think that AWS could trade in the $95 per share range if it were its own independent entity. The $40 to $50 billion valuation means that Amazon Web Services has a value that is greater than that gross domestic products of countries such as Honduras, Luxemburg and Paraguay. The analysts go on to say that AWS could be responsible for a $20B run rate by 2020.
Amazon Web Services continues to be one of the most respected and trusted IaaS providers in the world. Amazon CFO Tom Szkutak added no real explanation for why Amazon has decided to report AWS’s under the “Other” category nor did Szkutak say why AWS has all of the sudden decided to change its AWS revenue reporting practices. On the 4Q conference call, Szkutak did say, “We just think it’s an appropriate way to look at our business for 2015. And so our plan is to separating it out as of Q1 of this year.”
Robert W. Baird also mentions that Amazon’s target stock price should be in the $425 range. At the time of this writing, Amazon’s stock is currently sitting in the $380 per share range.
