AMZN Stock: Could Amazon Stock Reach $1,000?

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Holiday Sales Foreshadow AMZN Stock Rally

Once again, Amazon.com, Inc. (NASDAQ:AMZN) has won the holiday season. The giant e-commerce company sold millions of its new “Amazon Echo” devices in the holiday rush, which could help fuel AMZN stock over the coming decade.

To put it in perspective, the Echo is today what the “iPhone” was a decade ago. It is a giant leap forward in technology, but it’s all happening under the radar. The true potential of the Echo has not been priced into AMZN stock, which presents us with a massive opportunity.

But let’s back up for a second. What is it that makes the Echo so special?

On the surface, it’s just a voice-controlled speaker that you can activate using your voice. You can tell it to play music, turn on your TV, or adjust the temperature in your house. But those functions are just the tip of the iceberg.

The Echo now has approximately 5,100 skills, a five-fold increase from the second quarter of 2016. Amazon is continually broadening the device’s capabilities, like when Apple Inc. (NASDAQ:AAPL) kept adding new apps to “iTunes.” More apps made the iPhone more useful and attractive to users.

Much in the same way, the Echo can now read you the morning news or remind you to pay your bills. It is like a personal assistant.

There are two reasons why this is amazing for AMZN stock.

For one thing, talking is easier than typing. The Echo understands natural speech patterns and is able to respond in an organic way, which removes the need to type anything on your phone. It allows people to harness the Internet without using a screen.

That’s never been done successfully before. Clearly this time is different, because Amazon has already sold an estimated 5.2 million of these devices. (Source: “Alexa Devices Top Amazon Best-Seller List this Holiday – Millions of Alexa Devices Sold Worldwide,” Amazon.com, Inc., December 27, 2016.)

These voice-activated devices could soon be in every U.S. household, suggesting that AMZN stock has massive upside potential. They are far and away the market leader. While we don’t know how much profit that equates to, the margins on high-end electronics tend to be pretty good.

That’s the first reason to be bullish on AMZN stock. The second reason is that the Echo opens up the Internet of Things (IoT) market.

Connecting regular, boring home devices to the Internet is supposed to be a big moneymaker, according to everyone and their uncle. Half of Silicon Valley is competing for a slice of this market, but Amazon just nabbed the entire cake.

They realized that even if your thermostat, refrigerator, and light fixtures were wired with Internet connectivity, you’d still need a way to control them. Most people were just building apps so you could access them via a smartphone, but the Echo makes more sense.

It’s hands-free, voice-activated, and always listening. There’s a reason that sales have more than doubled in the last year: it’s because the Echo is a verifiable hit.

Mark my words: this device could easily become as big the iPhone. Right now the market has not priced in that potential for AMZN stock, but it will soon. And when it does, AMZN stock could easily hit $1,000.00 per share.