Venture Capitalist Chamath Palihapitiya is one of the speakers at the Next Wave Sohn Conference that is taking place in New York today. Palihapitiya was born in Sri Lanka and at the age of six, his family moved to Canada. In 2000, the investor moved to California and in 2005 joined Facebook, becoming one of its executives. In 2011, Chamath Palihapitiya formed his own venture capital company The Social+Capital Partnership, which last year was renamed to Social Capital. The focus of Palihapitiya’s presentation was Amazon.com, Inc. (NASDAQ:AMZN), which the investor called a “multi-trillion dollar monopoly hiding in the plain sight.”
“My prospective is that it is a story that’s just beginning. In fact, we believe and our models indicate that this is a $3.0 trillion company in the next 10 years,” Palihapitiya said.
The investor said that there are three parts to Amazon’s growth. The first is retail, which will reach $1.0 trillion in the next 10 years. The second part is not as well understood as retail, but is an “unbelievable opportunity” – Amazon Web Services, which could reach $1.50 trillion. The third includes other operations and cash that Palihapitiya sees at $500 billion.
Amazon Prime is a crucial factor for Amazon.com, Inc. (NASDAQ:AMZN)’s growth, according to Palihapitiya, as the investor considers that Jeff Bezos will stand up to his words to make it “functionally irresponsible to not be a Prime member”. Palihapitiya forecasts that the number of units sold on Amazon will reach 30.0 billion per year in the next decade, which would result in the $1.0 billion valuation for the retail unit.
Regarding Amazon Web Services, Palihapitiya considers that would continue to expand as more and more companies will choose the cloud infrastructure over developing their own systems. Palihapitiya called AWS a “tax on the Internet.” “It is a tax on innovation, […] except this tax is owned by a for-profit company that we can all own,” he added.
“[Jeff Bezos] is building the most durable company in the world […] It’s something we can all own, it’s something that has a fundamental ability to participate in every single faucet of Internet value-creation,” Palihapitiya concluded.
Palihapitiya is among a huge pool of investors that support Jeff Bezos’ actions at Amazon. Andreas Halvorsen, Ken Fisher, Chase Coleman and Stephen Mandel are just a few of the other investors that are long the stock.
Earlier today David Rosen of Rubric Capital Management and Nick Danaher of Domando Capital gave presentations and pitched two other stocks: Kraton Performance Polymers Inc. (NYSE:KRA) and TripAdvisor Inc. (NASDAQ:TRIP) (read article).