Last week, Apple Inc. (AAPL) became the first U.S. company to exceed the $1 trillion threshold as the Street cheered better-than-expected earnings and touted prospects in new growth markets like software, accessories and services. Now, one venture capital industry pioneer is forecasting that the e-commerce and cloud computing giant Amazon.com Inc. (AMZN) will be the first to follow its FAANG peer to the $1 trillion club as it catches up to Google parent company Alphabet Inc. (GOOGL) in the high-flying digital advertising space and continues to dominate in markets like enterprise software.
Ann Winblad, the founding partner of Hummer Winblad Venture Partners, had expected the Seattle-based retail titan to beat the smartphone maker to the $1 trillion mark, as reported by CNBC. Amazon, whose market value exceeded $900 billion last month, has gained 58.8% year-to-date (YTD), compared to Apple's 22.3% rise, Google's 19.7% increase and the broader S&P 500's 7% return over the same period. (See also: 4 Reasons Apple's Big Stock Gains Aren't Over.)
The investor, who has over three decades of experience in tech, spoke with CNBC's "Squawk Box," indicating that "the growth behind Amazon is huge."
10% Growth in Enterprise Software in 2018
Last month, Amazon posted quarterly results in which revenue missed forecasts, yet profit topped $2 billion for the first time thanks to higher margin advertising and cloud segments.
While Facebook Inc. (FB) and Google maintain leadership in the digital ad space, commanding a combined 57% hold over U.S. spend, according to eMarketer, Winblad sees Amazon as positioned to play catch up. She added that Amazon should benefit from Facebook's data privacy scandal.
While "enterprise software is not a sexy topic," said Winblad, who helped launch over 150 software companies, its growth potential should not be overlooked. She indicated that spending by big companies on software has grown near 10% to reach $400 billion in 2018, and will increase close to 9% next year. "This may be accelerating," according to Winblad, noting that the world is in the midst of a digital transformation.
She also commented on pressure from the White House and looming tech regulation, downplaying risks due to "tremendous competition between tech giants that benefit the consumer." Winblad indicated that any individual company today has a "bigness impact" significantly less than International Business Machines Corp. (IBM) in the '70s or Microsoft Corp. (MSFT) in the '80s. She partially attributed the rapid growth of the tech giants to the intensity of the competition between them. (See also: How Jeff Bezos Became the World's Richest Man.)