Thanks to a bunch of high-margin new businesses.
Amazon could be worth $1 trillion (£763 billion) by the end of 2018, according to a bullish calculation sent to investors by Morgan Stanley.
The bank also predicted the firm could hit a $2,000 (£1,526) share price in the next 12 months.
The major reason: Amazon has built several fast-growing businesses on top of its core, massive retail business. Specifically, there's Amazon Web Services, advertising, and Prime subscriptions. All of these are fledgling compared to retail (though still pretty huge in their own right), which Morgan Stanley values at $600 billion.
"Amazon's high margin [revenue] disclosure speaks to the $1trln ($2,000/sh) sum of parts bull case," wrote analyst Brian Newark in the note, titled: "The math behind the trillion dollar bull case."
It's already clear that Amazon has quietly built several multi-billion dollar businesses alongside its main shopping function. Morgan Stanley notes that all of these businesses offer high margins, leaving Amazon with lots of cash to reinvest in its business.
Newark estimated that Amazon's $600 billion retail business would achieve a 13% annual sales growth in its core e-commerce proposition by 2022, and 5.5% operating margin the same year. He calculated its third-party marketplace business would hit 25% profit margin in the same timeframe.
He also estaimted 18% topline growth for 2022 for Amazon Web Services, and a 50% profit margin.
Prime subscriptions are estimated to bring in $21 billion in revenue by the time we reach 2022, marking a 17% compound annual growth rate. Newark predicted subscriptions would reach 146 million households globally (it's currently sitting at 90 million.)
Finally, Newark estimated a 22% compound annual growth rate for Amazon's advertising business by 2022, bringing in $12.5 in revenue. "This outlook is arguably conservative if AMZN were to be successful, as it only implies that AMZN grows to become 4% of the US 2022 online ad market. That said, even in that scenario, we argue AMZN's ad business is worth $55bn," he wrote.
Morgan Stanley reiterated its $1,250 target for Amazon.