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Truist Securities has reiterated its Buy rating and $226.00 price target on Amazon.com (NASDAQ:AMZN) stock, currently trading at $217.32 with a market capitalization of $2.31 trillion. According to InvestingPro’s analysis, Amazon maintains a "GREAT" financial health score, supporting Truist’s positive outlook on the company’s Project Kuiper satellite internet initiative. The firm expects Project Kuiper to become an increasingly significant component of Amazon’s growth strategy over the next 12-18 months.
Amazon is scheduled to launch its second batch of satellites on Monday, June 16, as part of its plan to create a constellation of 3,232 low Earth orbit (LEO) satellites. This launch represents a key milestone in Amazon’s efforts to commercialize its satellite internet service by the end of 2025.
Truist projects that Project Kuiper could generate annual revenue of approximately $6 billion by 2030, based on early technological successes and global demand for broadband connectivity. This would add to Amazon’s already impressive revenue stream of $650.31 billion. The firm’s estimate assumes a similar adoption rate to competitor Starlink’s service, with the broader analyst community maintaining a Strong Buy consensus on Amazon stock, setting price targets ranging from $195 to $305.
The satellite constellation represents a substantial investment for Amazon, with Truist estimating total global investment in the range of $13 billion to $15 billion. Despite this significant capital expenditure, the firm views the project as a valuable addition to Amazon’s diverse business portfolio.
Truist noted that while Amazon’s stock price is approaching its current price target, it remains positive on the company’s outlook. Technical indicators from InvestingPro suggest the stock is currently in overbought territory, and the firm indicated its financial model is under review pending Amazon’s performance through the end of the current quarter. For deeper insights into Amazon’s valuation and 12 additional ProTips, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Amazon.com has announced a substantial investment of at least $20 billion in Pennsylvania to expand its data center infrastructure, focusing on artificial intelligence and cloud computing technologies. This initiative is expected to create a minimum of 1,250 high-skilled jobs and support thousands more in the Amazon Web Services data center supply chain. The investment will initially target Salem Township and Falls Township, with other communities in Pennsylvania also being considered. Additionally, Amazon plans to introduce training programs to support local communities, including workshops and educational opportunities in STEM fields.
In a separate development, Talen Energy Corp has expanded its nuclear energy agreement with Amazon Web Services to supply carbon-free energy from its Susquehanna nuclear power plant. This agreement aims to provide Amazon with 1,920 megawatts of nuclear power through 2042, supporting Amazon’s operations in Pennsylvania. This partnership is expected to secure jobs for over 900 employees at the Susquehanna facility and potentially lead to the development of new Small Modular Reactors.
Furthermore, Barclays (LON:BARC) has reiterated its Overweight rating for Amazon stock, maintaining a price target of $240 per share. The analysts highlighted Amazon’s growing presence in the Indian e-commerce market, noting a 14% growth in Amazon India’s business-to-consumer revenue for the year ended March 2024. Barclays also provided insights into Amazon’s Kuiper satellite project, which is expected to impact the company’s financials in 2025 with a projected cost of approximately $2.5 billion.
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