It seems nothing can derail the Amazon.com, Inc. (Nasdaq: AMZN ) train, and analysts say the company's dominance in both retail and cloud services will continue to fuel the stock for at least the next five years. In fact, Amazon may account for nearly 10 percent of all U.S. retail sales within two years and capture the largest share of a $475 billion cloud services market by 2023.
According to Telsey Advisory Group analyst Joseph Feldman, Amazon captured 5.6 percent of total U.S. retail market share in 2017, but its retail market share will reach reach 9.6 percent by 2020.
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"The ongoing consumer spending shift to e-commerce and greater share of wallet via expansion in new and existing categories, such as apparel, grocery, home, health care and media, should help," Feldman wrote in a new note on Monday.
Feldman says the largest growth areas for Amazon's retail business are drugs and food.
"The shift to online grocery is being driven by consumers' increasing comfort with buying almost anything online, along with greater product availability and improvement in the supply chain to offer faster delivery," he said.
Feldman said Prime Now grocery, which offers one-hour and two-hour delivery services, will be a game-changer for Amazon . Amazon's bottom line could also get a big boost after the company recently announced the price of its annual Prime membership will rise from $99 to $119 starting on May 11. Amazon Prime has more than 100 million subscribers.
At the same time Amazon's retail business is booming, Bank of America analyst Kash Rangan says cloud leaders Amazon , Microsoft Corp ( MSFT ) and Alphabet ( GOOG , GOOGL ) will be the biggest long-term winners from the secular trend of digital transformation in the business world.
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"Channel checks with several of the largest cloud computing consultants indicate that AWS has the best cloud capabilities, as exhibited by its constant new feature rollout, with [Microsoft] Azure close behind, and Google Cloud making big improvements," Rangan says. "AWS and GCP are moving up the cloud stack to capture greater wallet share."
Rangan estimates that the total addressable cloud market will expand to $475 billion by 2023.
Telsey has a $1,900 price target for Amazon. Bank of America has a "buy" rating and $1,840 target for AMZN stock .