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Investors rewarded e-commerce leader Amazon.com ( AMZN ) after the company late Thursday posted Q1 earnings that handily beat expectations, as Amazon Prime and the Amazon Web Services cloud business continued to roll. In midday trading on the stock market today , Amazon stock rose 9.3% to about 658 after hitting 669.98 earlier. The company’s stock more than doubled in 2015 but — much like the rest of the market — struggled in early 2016. The stock plunged three months ago after the company missed Wall Street’s outsized Q4 expectations . Jefferies analyst Brian Pitz bumped its price target 11% on Amazon, to 865. “While AMZN continues investing in Prime, Q1 results were a nice reminder of its huge potential,” Pitz wrote in a research note Friday. “Increasing Prime usage drove revenue and unit growth acceleration as broad product selection (enhanced by Fulfilled By Amazon sellers), digital content and flexible delivery options attract users to Amazon and keep them buying.” IBD Take: Amazon.com has a mundane Composite Rating but still looks good. Check out Stock Checkup. John Blackledge, a Cowen analyst, upped his price target to 830 from 750, citing the company’s guidance — which was largely above what Wall Street expected — and the fact that Amazon of late has posted sales near or above the high end of its guidance. Amazon Web Services, the company’s cloud computing operation, is slowly dwarfing its Amazon’s core e-tail business. According to Wall Street Journal financial editor Dennis Berman, AWS is more profitable than the company’s core operations, though it accounts for only 15% of the sales. “Could AWS be worth more than IBM?,” he tweeted Thursday . IBM Q1 sales were $18 billion. AWS revenue spiked 64%, to $2.57 billion. Alphabet ( GOOGL ), via its Google unit, and software giant Microsoft ( MSFT ) have aggressively been competing with AWS. Scalper1 News
Scalper1 News