Amazon.com has once again demonstrated its unstoppable revenue growth, leading industry analysts to declare it back in the esteemed $1 trillion club. The company’s extraordinary results exceeded expectations, fueled by investments in expediting shipping processes and a significant increase in the number of Prime members. In response to this outstanding performance, nearly half of the 51 brokerage firms covering Amazon have raised their 12-month price targets on the company’s stock.
Benchmark analysts, in a note titled “Not-so-subtle Reminder Amazon is Still King,” recognized Amazon’s size and capacity advantage and subsequently increased their price target by $150 to $2,400. The company’s net sales experienced a substantial surge of 21%, reaching $87.4 billion, with sales from Amazon Web Services (AWS) growing by an impressive 34%. Furthermore, revenue from subscription fees soared by 32%, indicating a growing number of shoppers subscribing to Prime services.
Industry experts are confident in Amazon’s ability to further revolutionize the retail sector through its extensive fulfillment infrastructure, with Canaccord Genuity analyst Michael Graham stating that Amazon is only halfway through this transformation. J.P. Morgan analyst Doug Anmuth raised his price target on the company’s stock to $2,525 and included Amazon as one of the brokerage’s top picks on its U.S. focus list. Anmuth believes that Amazon’s ability to accelerate revenue growth at such a significant scale is a clear indication that its investments in Prime One Day are paying off, fueling his optimism about the company’s performance in 2020.
For some time, Amazon has been positioned within the $1 trillion club, alongside other technology giants like Apple Inc, Alphabet Inc, and Microsoft Corp. However, investors and analysts are now setting their sights on the next potential companies to join this elite group, with Visa Inc and Mastercard Inc emerging as strong contenders.
As Amazon continues its commitment to improving delivery times, its fortunes may become increasingly intertwined with those of its delivery partner, United Parcel Service Inc (UPS). Currently, UPS derives over 10% of its revenues from its partnership with Amazon. Analyst Rohit Kulkarni from MKM Partners even predicts that Amazon’s logistics business could surpass UPS within the next five years.
All in all, Amazon has solidified its position as a dominant force in the e-commerce industry. With its impressive revenue growth, investments in expedited shipping, and a remarkable surge in Prime membership, the company is making remarkable strides in reshaping the retail landscape. As Amazon continues to execute its strategies, both analysts and investors maintain a sense of optimism about the company’s future performance.