It’s not every day that Amazon launches or acquires a new business, but when they do, it has a good chance of scaling into a business that makes millions, if not billions of dollars. Not only that, but it makes the entire business stronger.
Just look at Amazon’s creation of Amazon Web services (AWS), which brought in almost $50 billion in revenue in 2020, or successful acquisitions such as Zappos, Audible, or Whole Foods. There is also Prime Video and Music, which helps them maintain over 90% customer retention. That is hugely impressive given their scale.
The fact is, Amazon knows how to target the right sectors and businesses and that is why I’m so excited by one of the newest businesses that Amazon has launched, targeting an industry that is forecasted to reach $1 trillion by 2035 according to McKinsey.
I’m talking about quantum computing, a whole new way of processing data that will have an impact on almost every industry imaginable. For instance, it could help pharmaceutical companies with more efficient drug discovery or help create more effective solar panels. The use cases are infinite and this industry is just getting started.
At its core, quantum computing is fundamentally different from how classical computing works today. While I don’t want to get into nitty-gritty details, simply put classical computers rely on transistors, which can either represent a 1 or 0 at any given time. Quantum computers use qubits, which can represent both 0 and 1 simultaneously, giving them the ability to process exponentially more data.
The business I’m referring to is Amazon Braket. This is a new service out of AWS that lets its customers access quantum computing cloud services. In the cloud, you can build your algorithms, test, run and analyze the data all in one place. Not only that, but Amazon offers different types of quantum hardware including trapped ion, superconducting, and annealing devices.
While we are still early, there are already big customers using this service including Volkswagen Group, Amgen, and even Goldman Sachs. Warner Vogels, the CTO of Amazon is even so exciting about this business that he is not ready to retire.
On top of their cloud services, they recently announced the opening of the AWS Center for Quantum Computing, which will be the home of AWS Quantum Technologies. This goes in lockstep with their other recent announcement that they would look to build their own quantum hardware. This is a huge deal and shows they are in this business for the long haul.
Not only does this mean big business for Amazon, which is why we are talking about them today, but it means big business for companies at the forefront of this space, building the hardware and software for the future of quantum computing.
Now, Michael has brought up the strength of Amazon as an investment before. In fact, he’s often been one of the first people to project even more amazing growth for them, even when others have seen the immense heights that they’ve achieved, and thought that surely, they couldn’t go any higher.
But that being said, $3,000 is a huge entry price point for just one stock, and oftentimes, something less well-known can be a more powerful source of growth. That’s why Michael has picked out an alternative play, a company powering quantum computing services globally, and a new technology that could create $8 trillion in new wealth. You can see exactly what I mean right here.
Cheers and good investing,