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Analysts Raise Amazon Price Target Ahead of Earnings Release
Here's what's next for Amazon stock.
On July 5, 1994, Jeff Bezos, a young Princeton University graduate, introduced the world to his bright idea.
Bezos ran his company out of the garage of his Bellevue, Washington, rental home, and initially named it "Cadabra," which is similar to the traditional magician's spell "abracadabra."
However, it is said that he was concerned that the name was too close to the word "cadaver" (屍躰), so he dropped it.
Bezos translate all over the dictionary, and finally chose "Amazon", because it is a "full of exotic, different from the rest", as he envisioned his own company.
The entrepreneur decided to sell books online, and the fledgling company sold its first book - Douglas Hofstadter's Flow Theory and Creative Analogy: On July 16, 1995, the company sold its first book - Douglas Hofstadter's Flow Theory and Creative Analogy: A Computational Model of the Fundamental Mechanisms of Thinking. A Computational Model of the Fundamental Mechanisms of Thinking.
It goes without saying that Amazon (AMZN) It's getting bigger. Over the years, the company has moved from books to a variety of products and services, including Prime Video, which offers hundreds of movies and films to more than 200 million members worldwide.
The term "Amazon Accomplishment" has become a buzzword referring to the disruptive impact of e-commerce on the global retail industry.
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As Business Grows, Amazon Builds Artificial Intelligence Footprint
On July 5, 2021, the 27th anniversary of the founding of Amazon, Bezos stepped down as its chief executive officer. Today, the company he founded in his garage has a market capitalization of about $1.9 trillion.
In February, Amazon announced that fourth-quarter revenue jumped 14% to $170 billion from $149.2 billion in the same period last year.
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Net income surged to $10.6 billion, or $1 per share, from $278 million, or 3 cents per share. Strong holiday sales fueled this growth.
"While we made meaningful progress on our financial metrics, we are most pleased with the continued improvement in customer satisfaction across all of our businesses," Andy Jassy, Simmons Executive Officer, told analysts on the company's earnings call.
"These results represent the invention, collaboration, discipline, execution, adaptation and rethinking of the entire Amazon team," he said.
Amazon Web Services (AWS) revenue grew 13%, outpacing the 12% increase in the previous two quarters, and AWS operating profit climbed 38%. AWS is a cloud services provider that is used by businesses and governments to store and manage data. Customers are increasingly using it to train and run large-scale language models and other artificial intelligence solutions.
On March 27, Amazon said it would look to improve its AI-related products, spending $2.75 billion to support Anthropic, a San Francisco-based company that researches generative artificial intelligence, following a $1.25 billion investment by Amazon in September.
Amazon is scheduled to announce its quarterly results on April 25, later this month.
Analysts polled by FactSet expect the company to report earnings of 83 cents per share on sales of $142.62 billion. In the same period last year, the company reported earnings of 31 cents per share on revenue of $127.4 billion.
Analysts believe fees will increase revenue
Wells Fargo analyst Ken Gawrelski raised his firm's price target on shares of Amazon.com from $211 to $217 while maintaining a Hold rating on the company's stock.
Gawrelski said in an investor note that he would also put the stock on his second-quarter Tactical Insights list ahead of the next round of active repairs.
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The analyst said he raised his second-quarter operating revenue estimate by about $750 million to $14.5 billion, beating the Wall Street by 15%, due to a new fee structure for Amazon's FBA, a service that allows third-party sellers to automate order fulfillment and shipping.
Wells Fargo sees $1.2 billion in incremental operating income from restructured FBA fees and externalization of costs driven by FBA storage costs, similar to the first quarter.
The analyst noted that his AWS checks showed continued acceleration in the first quarter, driven by "significantly slower optimizations, cloud migration acceleration and GenAI workloads."
Earlier this month, Fortune reported that the FederalTrade Commission began investigating a series of new fees recently imposed by Amazon on U.S. merchants selling goods through its online hypermarket.
The Federal Trade Commission filed a lawsuit against Amazon in September of this year, alleging that the company holds a monopoly in online retailing by raising prices and unfairly restricting competition by favoring its products over competing merchants, to the detriment of consumers.
The lawsuit alleges that Amazon "buries" low-priced products deep in its search rankings, effectively making them "invisible," while effectively requiring sellers to obtain "Prime" status for their products and then automatically linking them to the company's fulfillment services. The seller is then automatically linked to the company's fulfillment service.
In response to the lawsuit, Amazon said the suit "clearly demonstrates that the FTC's focus has fundamentally diverged from its mission to protect consumers and competition."
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