RW Baird analyst Colin Sebastian takes Amazon Web Services for a “potentially under-appreciated asset” although he thinks it’ll do $1.5 billion in revenue this year.
It takes a lot of capital outlay to support, roughly $500 million or about 50% of total 2010 capex, Sebastian thinks, and says its profitability is unproven.
Amazon doesn’t break out AWS numbers but has put its IaaS market share at about 60% and AWS boss Andy Jassy said this week that the cloud unit has the potential to be Amazon’s biggest business, outgrowing its online retail parent.