The stock of Amazon.com (AMZN stock) has taken a severe beating ever since the company released its most recent earnings. On Wednesday, the United States Department of Defense provided additional support for the bullish case for shares.
The Department of Defense (DoD) recently publicly announced the awarding of multiple contracts totaling up to $9 billion for a cloud-computing initiative known as the Joint Warfighting Cloud Capability. They contacted Amazon (ticker: AMZN), Microsoft (MSFT), Alphabet (GOOGL), and Oracle, which are the four most significant cloud-computing corporations in the United States (ORCL).
AMZN Stock Price Forecast
The announcement comes just a little over a month after Amazon’s cloud unit, AWS, posted revenue growth of 27% for the third quarter. This was the weakest gain since 2014 and was significantly lower than the 32% that Wall Street had penciled in for the company. This year, Amazon’s share price has dropped by 47%, reaching $90, compared to a decline of 30% for the Nasdaq Composite. Since reporting earnings for the third quarter, it has experienced a decline of almost 20%.
Citigroup’s Ronald Josey said in a note on Thursday that the contract with the Pentagon will boost growth for Amazon’s cloud company, AWS. This is although 2018 has been a challenging year for the technology sector in general.
He added, “we regard the JWCC contract as a possible stimulus for continued Public Sector work together with the continued adoption of AWS across almost every major business.” “We consider the JWCC deal a potential catalyst for continued Public Sector work.”
In addition to the contract, Amazon has two more variables for its stock: new items and pledges from clients totaling billions of dollars. Both of these factors are positive.
Several new Amazon products, including AWS Supply Chain, Amazon Security Lake, and AWS SimSpace Weaver, were unveiled at AWS re: Invent, the most...
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