Will This “Magnificent Seven” Stock Overtake Microsoft and Nvidia As the Largest Company in the World By 2030?
During Nvidia And Microsoft If they are shopping to see which company will maintain its position as the largest in the world with its market value, another competitor is hidden in the background: Amazon (NASDAQ: AMZN).
Amazon is a choice of dark horse to be the largest company in the world in a few years, because star has several episodes that grow at an impressive rate when producing snow. But is there enough fruit juice to cross existing leaders until 2030? Let’s see.
Image Source: Getty Images.
Amazon is more than the e-commerce platform that you interact with while shopping. In addition to selling online products, there are many things that deliver them to your door, but none of these aspects excite me about the stock.
Instead, I am most interested in the company’s advertising and cloud computing segments. The advertising wing was almost five years ago. Now, online stores, third -party sellers and Amazon Web Services (AWS) has become the fourth largest segment. At the same time, the fastest growing segment increased by 18% in the first quarter.
The company has some of the most valuable consumer data such as direct information about shopping habits. This makes advertising data incredibly strong, so the management was smart to make money from it.
Another reason why this segment is so important is increasing margins. The company does not destroy the margins of its individual operations and advertising is divided into Amazon’s North America and international trade segments. However, from examining advertising -oriented businesses Meta PlatformsIt is clear that this section is probably an incredibly high activity margin.
This is very important for the future of Amazon, because the faster growth of higher margin segments will allow the profits to increase rapidly.
The same dynamic is happening in AWS ‘ Cloud computing segment, It benefits from two main trends: a general migration to internal cloud -based solutions and the increasing adoption of AI workloads.
Both of these create large growth catalysts for AWS, and why produce a solid growth of 17% in the first quarter. Fortunately, the Amazon margins for investors. In the first quarter, AWS’s operating margin was an impressive 39%. Although it constitutes 19% of the total income, it contributed to 63% of the company’s total business profit.
As long as AWS continues to grow rapidly, Amazon’s profits will rise much faster than its general income, which we see that we have been playing with stocks for the last few years, but this trend is slowing down a little.
Although business profit growth is not as fast as once, it still provides a healthy growth. But is this enough to push it to the top by 2030?
It is unlikely that Amazon will see a different rapid growth catalyst than what happened in the next five years, so the increase in high single -digit income increased and 20% increase in activity profit are reasonable expectations for investors.
And the stock is valued at the same level as Microsoft and Nvidia, so there is no argument to see a large number of increases from the price in the next few years.
As a result, I do not think that 20% of Amazon’s operating profit growth will enable significantly to exceed the rising Nvidia. However, it may allow Amazon to capture a low -double -digit growing Microsoft.
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John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the Board of Directors of Motley Fool. Randi Zuckerberg, former Market Development Director and spokesman of Mark Zuckerberg, CEO of Facebook and Meta Platforms, is a member of the Board of Directors of Motley Fool. Keithen Drury Amazon has positions in meta platforms and nvidia. Motley Fool, Amazon, Meta Platforms, Microsoft and Nvidia positions and proposes. Motley Fool recommends the following options: Long January 2026 Calls of $ 395 in Microsoft and short January 2026 Calls $ 405 in Microsoft. Motley Fool’s Explanation policy.
