Amazon shares have already surged 85 percent over the last two years. But a top-rated analyst at Piper Jaffray says it's still way undervalued. Michael Olson predicts the online retailer's stock could soar to $3,000 a share in two years. That would be a 65 percent leap from where it trades now. And it can do so, he says, without big changes to its business.
Analyst Michael Olson argues the true valuation of amazon - when you add its three main parts of - retail, advertising and the cloud - Is around $1.5 trillion. He arrived at that total by using multiplies applied to e-commerce companies instead of traditional bricks-and-mortar retailers.
The $3,000 prediction is slightly reminiscent of then CIBC Oppenheimer analyst Henry Blodget's audacious call during the dotcom craze in 1998. Now CEO and editorial director at Business Insider, Blodget back then correctly predicted Amazon shares trading at $40 would catapult to $400 in 12 months. The stock topped that just weeks later, then eventually sank in the dotcom crash.
If Piper Jaffray is right, it'll make Warren Buffett's Berkshire Hathaway look smart. Earlier this month, it disclosed it owned $860 million worth of Amazon shares.
Amazon shares rose slightly on the call.