2019 came and went in a flash. I don’t know about you, but I definitely ran out of shopping time and leaned on old Amazon – vintage of 1994 – to save me. Have a few minutes to spare while you are (not) at work (I swear)? Knock out a gift or two. How about a prank gift for a business colleague? Bags of coal? Check. Gift + Amazon gift wrapping? Check. All the while we are buying, Amazon is selling and almost sitting among the trillion-dollar market cap club.

It led us here at Canadian Value Investors to wonder 1) What is Amazon today, and 2) How big and profitable can Amazon actually get (i.e. can we make money off it)?

If you bought Amazon at its IPO you would be sitting on a gain of over 119,000%, or roughly $21,000 for every $18 invested! Although the stock sits at ~$1,800 it also split three times along the way (first 1 for 2 split, then 1 for 3, followed by another 1 for 2 split). 

We argue that Amazon is in multiple market segments in multiple regions, all with huge runways, and can get much bigger. Spoiler alert – we don’t think there is another 119,000% in the cards, roughly a 1 (one) quadrillion market cap, unless we end up in that dystopian future envisioned in Disney Pixar’s Wall-E…. we will cover the odds of this in a later article. In the meantime, let’s start at the beginning.