Pro: ‘AWS within Amazon is worth a trillion dollars’

Amazon.com Inc (NASDAQ: AMZN) may continue to struggle in the near-term but sky is the limit for the mega cap as far as its long-term prospects are concerned, says the co-founder of Zillow Group.

Spencer defends his extremely bullish view on Amazon

The American multinational is at the heart of the global cloud computing market that’s expected to grow at a CAGR of nearly 18% through 2028. On CNBC’s “TechCheck”, Spencer Rascoff said:

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Every big company I talk to is focused on moving its business to cloud and increasing its AWS spend. Yes, there might be less startup activity and fewer startups moving on to AWS in the short-term, but the long-term trend is hugely aggressive.

Last week, the American multinational executed a 20-for-1 stock split to make its shares more accessible to a broader range of investors.

Wall Street: Amazon.com Inc could be a $177 stock

Amazon has a market cap that sits just north of $1.0 trillion at present. Interestingly, however, Rascoff, on the CNBC interview, said its cloud business alone is worth that much.

AWS within Amazon is probably worth a trillion dollars. That’s 35 times operating income of $25 billion to $30 billion. So, you’re getting the U.S. and international eCommerce business for free. I think AMZN looks great for long-term investors.

AWS brought in a better-than-expected $18.44 billion in the latest reported quarter – a bright spot in an otherwise disappointing earnings report. Wall Street, on average, sees a 70% upside in AMZN from here.