MSFT - Amazon: $2 Trillion Reached - More To Come

2024-06-27 07:14:05 ET

Summary

• For the past 3 months, Amazon's stock outperformed the market with a 12.59% return, reaching a $2 trillion market cap milestone.
• I think there is more to come: Amazon's financials and recent developments show that the company's market position should help it reach new heights.
• AWS's exceptional performance, investments in AI, and focus on improving efficiency position Amazon for continued growth and profitability.
• My valuation model suggests that Amazon's market capitalization should keep expanding - the stock price could reach $247 by the end of FY2025.
• I maintain my buy recommendation for AMZN.

My Coverage History

I published my first and so far only article on Amazon.com, Inc. ( AMZN ) stock here on Seeking Alpha in March 2024 . At the time, I argued that AMZN was the cheapest stock of all megacaps, despite its seemingly inflated valuation multiples. I also argued at the time that while Amazon's stock price was only slightly above its pre-"mini-crisis 2022" highs, the company's business was growing disproportionately better. I expected then that AMZN stock would continue to rise thanks to the company's shift in focus (from retail to AWS) and its undervaluation. A little over 3 months have passed since then, and although AMZN did not become the fastest-growing stock of the mega caps, it managed to outperform the broader market with a total return of 12.59%:

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