Forget Buying All Seven: The "Magnificent Seven" Stock Most Likely to Double by 2028

The Magnificent Seven stock most likely to double by 2028 is Amazon, according to a recent analysis. Amazon's cloud computing division, Amazon Web Services (AWS), has seen strong revenue growth of 37% year-over-year, reaching $148.4 billion. This growth is driven by massive spending plans from AI start-ups. AWS has excellent profit margins, at 37% last year. If AWS revenue were to grow to $300 billion, profits could reach $100 billion even with margins dropping to around 30%.

Amazon's e-commerce platform and consumer electronics divisions contribute to $627 billion in retail revenue. The company's advertising division grew by 26% last quarter, and it is developing expensive projects like satellite internet service. Amazon is investing heavily in faster delivery, warehouse robotics, and self-driving vehicles, which could enhance operating leverage and margins.

The e-commerce segments are expected to grow at double-digit rates, with solid margin expansion. This could drive combined retail sales to $829 billion in two years, assuming 15% growth and a 10% profit margin expansion. Amazon's current EBIT is $98 billion. Combining the above estimates, Amazon's EBIT could double by 2028. With a current market cap of $2.7 trillion, Amazon trades at around 27x trailing EBIT, suggesting a potential to double by the end of 2028.

However, this does not guarantee a true doubling. One potential significant gain comes from Amazon's stake in Anthropic, the AI startup, which could be worth hundreds of billions of dollars if it goes public.