I recently finished reading Amazon Unbound: Jeff Bezos and the Invention of a Global Empire, a fascinating inside look at the history of the pioneering company and its founder.

The author, Brad Stone, Senior Executive Editor, Technology at Bloomberg, also wrote a previous book about Amazon entitled The Everything Store: Jeff Bezos and the Age of Amazon.

Stone provides a very well-researched account of how and why Bezos and his team have succeeded in creating a global juggernaut and details the missteps, as well.

Even though Bezos has stepped away from the CEO role, Amazon’s growth story is far from over.

Barron’s has made it one of its top 10 stock picks for 2022. Here’s why.

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by Andrew Barry

Amazon.com’s dominance in two major businesses makes it a rarity.

It has a 40% share of the U.S. e-commerce market and about half of the lucrative cloud-computing sector, through Amazon Web Services.

An estimated 85 million U.S. households are Prime members.

The stock (NASDAQ:AMZN), near $3,400, has trailed the market in the past year. It still isn’t cheap, trading for 66 times projected 2022 earnings, but none of its mega-cap internet peers has better prospects.

Amazon’s fastest-growing businesses, like AWS and advertising, have high margins.

Evercore analyst Mark Mahaney sees 20%-plus annual revenue gains and expanding margins over the next two to three years.

He has an Outperform rating on Amazon, with a price target of $4,300.

Mahaney calls Amazon the “TAMiest” of the mega-cap internet companies because of the huge opportunities in retail and cloud computing, while offering “the best mix shift in tech.” TAM refers to “total addressable market.”

With more than $60 billion in annual sales, Amazon Web Services could be worth $1 trillion alone.

That means investors are paying about $700 billion for the rest, which includes:

  • The leading online retail business
  • Offline shopping (including Whole Foods Market)
  • Advertising
  • Media (Amazon Prime Video, Audible)
  • And logistics, including warehouses, trucks, and planes.

Two potential pluses for 2022 would be a spinoff of AWS or a long-awaited stock split.

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