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Investing.com - Jefferies raised its price target on Amazon.com (NASDAQ:AMZN) to $255.00 from $250.00 on Tuesday, while maintaining a Buy rating on the e-commerce giant’s stock. Currently trading at $220.45, Amazon commands a market capitalization of $2.35 trillion and maintains a "GREAT" financial health score according to InvestingPro analysis.
The firm’s analysis shows Amazon shoppers remain resilient despite inflation concerns, with 47% of surveyed consumers spending the same amount on the platform over the past three months and 15% spending more. Only 3% of respondents reported they had stopped shopping on Amazon entirely, though 31% indicated they were spending less. This consumer resilience is reflected in Amazon’s solid 10% year-over-year revenue growth, with total revenue reaching $650.3 billion in the last twelve months.
Amazon Prime continues to drive customer loyalty with approximately 73% of survey respondents reporting Prime membership, significantly outpacing competitors like Walmart+ (26%) and Target (NYSE:TGT) Circle (22%). Industry estimates suggest Amazon has roughly 180 million U.S. Prime members compared to Walmart+’s estimated 26-59 million members.
The upcoming July Prime Day event, expanded to four days (July 8-11) across 20 countries instead of the typical two-day format, is expected to drive incremental Prime sign-ups, particularly among students and young adults through extended free trial offers.
Jefferies’ research indicates Amazon holds competitive advantages in key consumer decision factors, ranking first in shipping speed (72% of respondents versus 13% for Walmart (NYSE:WMT)), product selection (74% versus 13%), and user experience (67% versus 15%), while placing a close second to Walmart in pricing (37% versus 46%).
In other recent news, Amazon reported notable developments across various segments of its business. Bernstein raised its price target for Amazon to $235, citing growth in Amazon Web Services (AWS) and easing supply constraints. AWS’s growth rate slowed to 17% year-over-year in Q1, yet artificial intelligence contributions continue to expand significantly. Despite supply challenges, Amazon’s margins improved to 39% in Q1, though they are expected to moderate over the coming years. In a strategic move, Amazon plans to expand its Same-Day and Next-Day Delivery services to over 4,000 rural communities by 2025, investing $4 billion to enhance its delivery network. AWS has also strengthened its collaboration with Veeva Systems (NYSE:VEEV) to support the life sciences cloud infrastructure. Additionally, Amazon’s Ring introduced a Smart Video Search feature, allowing users to search video history with text queries, set to launch in November 2024. Meanwhile, AWS saw the departure of a key executive in its AI division, as competition for AI talent intensifies. These recent developments underscore Amazon’s ongoing efforts to enhance its services and infrastructure across various sectors.
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