After a more than six-fold gain in five years many on Wall Street are wondering just how much further Amazon.com Inc. (AMZN) can rise. The answer—a lot farther, at least according to a speculative “bull case” scenario provided by analysts at Morgan Stanley. Revenues from advertising, cloud computing and the e-commerce giant’s Prime service could push the stock’s price to as high as $2,600, implying a 45% upside from Thursday’s close, according to Barron’s.

 Stock/Index  Past 5-Year Performance
 Amazon  484.4%
 Alphabet  113.3%
 Apple  213.7%
 Facebook  698.8%
 Netflix  1,025.1%
 Nasdaq Composite  117.3%
 S&P 500  66.6%

Strong Growth

While Morgan Stanley’s price target of $1,700 is below Amazon’s current stock price, the bank’s analysts do see a way in which that price could hit the significantly more optimistic forecast of $2,600. This bull case scenario rests on a sum-of-parts valuation, valuing the company’s separate businesses on an individual basis and then adding them up to get a combined total value. At $2,600 per share, the total market capitalization would be $1.3 trillion.

The strengths in Amazon’s advertising, cloud computing and Prime businesses “are enabling Amazon to continue to invest as hard as ever while also delivering higher profitability and revisions,” the bank’s analysts wrote.

They see Amazon’s earnings before interest and taxes (EBIT) from advertising, Amazon Web Services (AWS) and subscriptions for the year coming in at 17x what the company’s total EBIT was in 2010. Between 2017 and 2020, the analysts suggest a possible scenario where AWS revenue grows at a compound annual growth rate (CAGR) of 39% and advertising revenue at 61%, according to Barron’s.

Trading at a lofty 88.85 forward price-to-earnings ratio (P/E ratio), Amazon may look expensive. But with significant potential growth opportunities, out of 52 of the analysts that cover the giant e-retailer, Bloomberg recently found that all but one recommended owning its shares. (To read more, see: Amazon Is Now in Value Stock Territory: Bloomberg.)

More Tepid Outlooks

Amazon still, however, faces numerous challenges. As the company has grown its executives have become targets for e-commerce startups looking to poach top talent. Also, international growth will become increasingly more difficult with the rise of Chinese-based international rival Alibaba. (To read more, see: The Next Amazon-Alibaba Battle Will Be Fought In Southeast Asia.)

Not all are quite as optimistic, however. Amazon could lose as much as 15% based on several technical indicators pointed out late last week. One such indicator was a bearish technical rising wedge, which is considered a reversal pattern. Also, the relative strength index (RSI) for the stock had been trending lower since the middle of June, an indicator that the stock is losing some momentum. Volume levels have also been declining steadily, suggesting less buying activity.

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