Buffett’s Amazon Stock Hoard Will Be Worth $1.4 Billion in 24 Months

Journalist:
Wes Messamore @thehuli
May 24, 2019

By CCN: In a shockingly-bullish call, Piper Jaffray predicts that Amazon stock will surge to $3,000 in as little as two years. That means Warren Buffett and Berkshire Hathaway’s recent $900 million AMZN acquisition could be worth $1.44 billion in 2021.

According to Piper analyst Michael Olson, this is a conservative projection of Amazon’s stock price into the future. He says this stunning 65% price rally will be easily attainable on the momentum of Amazon’s current operations:

“We believe AMZN shares will reach $3,000 by sometime between mid-’21 and mid-’22 or within 24-36 months. We have a high degree of confidence that AMZN shares can reach this level with no major acquisitions or other significant changes to the business.”

Amazon Stock Will Easily Surge 65% in Less Than 36 Months

Amazon stock has had robust growth from 2017 to 2019. You might also get away with saying it’s had some pretty robust growth from 1997 to 2019.  | Source: Yahoo Finance

This wouldn’t be the first time the retail giant’s stock embarked on a stellar price run. Piper used conservative multiples to arrive at their figure. If Amazon stock trades at $3,000 in two years, it will actually be underperforming its last two years, in which shares grew 86%. AMZN shares are up 20% for the year so far.

Amazon has been one of the dot-com industry’s most lucrative growth investments since its IPO in 1997. A $100 stake in Amazon at the time of its IPO would have been five shares of Amazon. After three stock splits and 21 years of Amazon’s unstoppable expansion, that $100 investment would have become 60 shares worth a nest egg-making $120,762 at the end of trading on August 31, 2018.

AMZN: Warren Buffett’s Latest Growth-and-Value Investment

Warren Buffett watched the entire ride up without hopping on, and he has been kicking himself the whole time. He even suggested that he had some kind of “psychological problem” that kept Berkshire out of Amazon for so long.

It’s apparently tough for an investor like Buffett to feel the sting of buying a stock at a much higher price years after he knew the company would make something “close to a miracle” happen in commerce.

Warren Buffett’s asset managers at Berkshire Hathaway must have seen the same indications that inform Piper Jaffray’s assessment.

When challenged by a shareholder about Berkshire’s deep stake in the high-growth tech stock, Buffett assured investors that this was an investment in line with the value investing principles that have made him the third-richest man in the world.

This article was edited by Josiah Wilmoth.

Wes Messamore @thehuli

Living in Nashville, Tennessee, United States (since 2001). Bachelor of Business Administration from Belmont University in 2009 (majored in Entrepreneurship). Organized Senator Rand Paul's first and second online fundraisers in 2009. Got the highest-paying non-profit internship in Washington DC in 2010. Roving editor for the Independent Voter Network. Applying economic principles, I accurately predicted the effect of cannabis legalization on drug-related violent crime in 2010. Email me | Follow Me on Twitter (followed by: fmr Rep. Ron Paul (R-TX), Sen. Rand Paul (R-KY), fmr NM Gov. Gary Johnson, and Rep. Thomas Massie (R-KY))