Analysts Predict $3 Trillion Valuations for Amazon and Alphabet Driven by AI Investments
Analysts forecast Amazon and Alphabet could reach $3 trillion market valuations within a year, driven by AI.
Key Points
- • Morgan Stanley predicts Amazon's market value will surge to $3 trillion within 12 months.
- • Phillip Securities estimates Alphabet will also achieve a $3 trillion valuation soon.
- • Amazon's AI initiatives are expected to boost revenue and profitability across key sectors.
- • Alphabet faces antitrust lawsuits but is adapting its services with AI integration.
In a significant forecast, analysts from Morgan Stanley and Phillip Securities are projecting that both Amazon and Alphabet will reach market valuations of $3 trillion within the next year, driven by their advancements in artificial intelligence (AI). Morgan Stanley's Brian Nowak has set Amazon's target share price at $300, suggesting a 34% upside from the current $233 price, leading to a market capitalisation of approximately $3.1 trillion. Meanwhile, Phillip Securities analyst Paul Chew predicts a target price of $250 for Alphabet, reflecting a 37% upside from its current price of $183, which would also position it at about $3 trillion.
Amazon is strategically employing AI technologies to enhance its revenue across its e-commerce, advertising, and cloud services sectors. The company leverages generative AI for various applications, including demand forecasting and logistics optimization, which are anticipated to improve profitability. Amazon Web Services (AWS) stands to gain significantly from these innovations, particularly through partnerships with AI startups like Anthropic.
Conversely, Alphabet, a leader in AI infrastructure and an influential player in digital advertising and cloud computing services, faces potential hurdles due to antitrust lawsuits. Despite this, the company remains focused on integrating AI across its platforms, enhancing user engagement on services like Google Search and YouTube.
Both companies' earnings outlook remains bright, with analysts projecting Amazon’s earnings to grow 10% annually through 2026, while Alphabet’s earnings are expected to rise by 8% annually. However, these expectations may be conservative given their recent performance. Additionally, both giants are dealing with risks posed by tariffs and the ongoing scrutiny of their market practices. The anticipated court decisions regarding Alphabet’s monopoly status could also have significant implications for its future operations.