Will Amazon Stock Make Jeff Bezos the First Trillionaire?

While the coronavirus pandemic has decimated the U.S. economy and many businesses are struggling to survive, Inc. (NASDAQ: AMZN) has been riding a wave of unprecedented demand. And last week the question was raised, will Amazon founder and chief executive Jeff Bezos become the world’s first trillionaire?

The question was prompted by a study from New York-based Comparisun, a content and comparison platform for medium and small businesses. It said that Bezos could potentially become the world’s first trillionaire as early as 2026 if his net worth continues growing at its present rate, about 34% on average over the last five years. This even takes into account the $38 billion he paid to his ex-wife in their divorce settlement.

Not Fans of Trillionaires

When the projection surfaced, social media reacted strongly. In general, the comments were unfavorable. One tweeted that “No one and I do mean no one should have that type of money.” Another said “it’s unsafe and awful” while a third called it “morally wrong.”

Here are other tweets:

Democratic U.S. House member Bonnie Watson Coleman weighed in:

Kimberly Graham, who is seeking the Democratic nomination for U.S. Senate in Iowa, wrote:

Making Some Big Assumptions

The Comparisun projection makes a lot of big assumptions, including that the value of the online shopping behemoth will continue rising as much as it has in the last five year, that Bezos’ personal wealth will continue growing at the same rate, and that Bezos will not make a huge philanthropic gift in an effort to address a large global problem.

Stock market analysts expect Amazon stock to outperform over the long term. Even after lockdowns because of the COVID-19 pandemic are lifted, a portion of the population will mostly stay at home after businesses reopen. They’ll continue to shop online and enjoy entertainment from streaming services, like Amazon Prime.

In first-quarter earnings reported last month, Amazon said that it had $5.01 in earnings per share (EPS) and $75.5 billion in revenue, compared with consensus estimates that called for $6.25 in EPS and $73.6 billion in revenue. In the same period of last year, Amazon reported $7.09 in EPS and $59.70 billion in revenue.

Company Sees Possible Operating Loss or Profit

The company said it expects to see net sales in the range of $75 billion to $81 billion, and income ranging from an operating loss of $1.5 billion to an operating profit of $1.5 billion in the second quarter.

A loss is possible because the company says it will spend $4 billion in response to COVID-19. Some Amazon workers have contracted the disease, resulting in a few protests over worker safety. The company says it will spend $300 million in the next quarter to develop testing capabilities for its workforce.

Shares of Amazon closed Monday at $2,409.78, off from the 52-week high of $2,475. Amazon shares have risen nearly 30% year to date. In comparison, the S&P 500 is down over 10% for the same period.

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