- Amazon Hits $1.5 Trillion market cap for the first time after Apple & Microsoft crossed the milestone last month during the ongoing pandemic.
Amazon Hits $1.5 Trillion market cap for the first time.
Amazon stock has been a disproportionately strong performer, with the booming demand for e-commerce in the COVID-19 pandemic up to 61 percent year-to-date share. On Monday, shares traded above $3,000 for the first time outstripping the 12-month targets of many analysts: Wall Street analysts currently have a target of $2,803.75 on Amazon shares.
Writing in a recent report, Deutsche Bank’s Lloyd Walmsley boosted the bank’s target for Amazon shares to $3,333, a high street, noting that Amazon is the “strong winner” of COVID-related disruptions and, despite its high ratings of customer satisfaction, will continue to reap benefits even as the lockdowns ease.
In a survey, the bank found that consumers rated Amazon higher than their e-commerce competitors, including eBay, Walmart, and Target. Amazon is also well-prepared to manage fluctuations in demand thanks to improvements in its e-commerce infrastructure, Walmsley wrote.
From a longer-term perspective, what drives the stock of Amazon to such amazing heights is its dominance of not one, but two massive and fast-growing markets: e-commerce and cloud computing. Amazon controls the lion’s share of the U.S. and many other countries’ online retail market and Amazon Web Services is a clear leader in the global market for cloud infrastructure.
Together, these huge industries are projected to generate annual revenues of around $7 trillion by 2023.
Analysts surveyed by FactSet expect the total sales of Amazon to increase in the second quarter on average, with a forecast of $80.7 billion for the quarter ending June 30, up from $63.4 billion in the quarter of the year-ago. Amazon ‘s core e-commerce business encompasses most of its overall revenue, including its online stores and third-party seller services.
Walmsley wrote that the AWS revenue outlook isn’t as strong in the near term but the rapid adoption of cloud services during COVID-19 will expand Amazon’s cloud division’s long-term growth potential.
Recently, Nasdaq Composite hit 10,000 for the first time amid market mania in June. The large round number felt like a fitting milestone for the crucial role that tech played in keeping markets afloat over the last few months.
An equally remarkable feat came inside the celebration: Apple and Microsoft both closed the trading session with a market value of $1.5 trillion, the first time any American stock had reached this level, and the twin titans of American technology crossed the line together
