Amazon share price rose to $192.70 up by around 3.4%, giving the e-commerce giant a market value of over $2 trillion. This valuation puts Amazon in the same club as technology heavyweights Microsoft Corp, Apple Inc., Nvidia Corp and Alphabet. 

Amazon stock rally

Amazon shares have whipsawed since the company’s Q1 earnings, when the cloud unit posted the strongest sales growth in a year. This helped the Amazon stock back above the all-time high set in April. The stock rallied in June, recovering losses from the end of May to gain about 27% so far this year.

Amazon.com Inc.’s rally pushed the tech giant deeper into record territory.

Amazon market value

The company is now a member of an elite club of a handful of peers that have surpassed the key market capitalization. Alphabet Inc. passed the $2 trillion threshold in late April, while rallies have pushed market values of Nvidia Corp., Microsoft Corp. and Apple Inc. to more than $3 trillion.

AI optimism

U.S. stock indexes have recorded robust gains this year on relentless enthusiasm around AI, optimism around resilience in the U.S. economy and potential easing of interest rates from the Federal Reserve.

Wall Street was trading near record levels, largely powered by megacap stocks such as Nvidia and Amazon, whose future cash flows stand to benefit from lower interest rates.

“Part of the good stock performance over the last six to nine months for Amazon has been related to the fact that it was oversold” at the end of 2022, said Dan Romanoff, an analyst at Morningstar Investment Service.

Amazon fifth biggest U.S. company

Shares of Amazon, which were added to the blue-chip Dow Jones Industrial Average index in February, have climbed over 26% this year. The company became the fifth biggest U.S. company by market value in February after Nvidia went up a spot.

Amazon Web Services is the largest cloud services provider in the world, and growth at the Amazon unit has returned after a dip in the past year, thanks to surging adoption of AI technologies.

The company has also invested in AI startup Anthropic and robotics firm Figure as it looks to capitalize on the AI boom.

Late last year, Amazon unveiled a new generation of custom-designed chips used in data centers, targeting applications for machine-learning training and generative artificial intelligence.

Amazon stock

Amazon shares rose as much as 3.6% to a price of $192.70 on Wednesday.

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Price target boosts from trusted financial advisors bolster up the stocks for a short-term lift and Amazon’s stock price just got that on Tuesday. As of October 3, 2023, Amazon has a market cap of $1,344 billion, making it one of the most valuable companies in the world.

Factors Driving Amazon’s Stock Analysis: Amazon Stock Price Soars

On Monday, several factors conjured to hoist up Amazon’s share price by 1.4 percent, which even topped the sultry flat performance of the S&P 500 index on the same day. About three perennial influential analysts did their magic and voila – Amazon looks good in the stock market. 

Amazon’s strong financial performance has also contributed to its stock’s positive momentum. The company has consistently delivered robust revenue growth and has diversified its business into various sectors, including e-commerce, cloud computing, and digital streaming. This diversification has positioned Amazon as a major player in multiple industries, further bolstering investor confidence.

Over the past five years, Amazon’s stock price has experienced significant growth, outperforming the broader market. 

Goldman Sachs Strategist’s Endorsement

A factor that positively impacted Amazon’s stock market performance is the endorsement from a Goldman Sachs strategist Cormac Conners, who flagged it as a top megacap pick. 

Waxing positively on Amazon’s stock analysis, Conners published a research note listing seven worthy investment tech megacaps following their recent share price swings. Amongst the seven were Amazon, Nvidia, Tesla, Apple, Microsoft, Meta Platforms, and Alphabet. 

“The divergence between falling valuations and improving fundamentals represents an opportunity for investors. On a growth-adjusted basis, the mega caps trade at the largest discount to the median S&P 500 stock in over six years.”

This endorsement highlights the confidence that industry experts have in Amazon’s stock growth potential and long-term prospects. 

Mizuho Analyst Rates Amazon’s Stock Analysis As A Top Pick

As per Barron’s, Mizuho analyst James Lee also had a bullish take on Amazon’s stock analysis. 

Lee repeated his Buy rating and the $180 target price on Amazon shares. His indulgent stock market decision also was a factor that made Amazon stock a worthy buy in the eyes of the common stock trader-beholder.   

Another UBS Prognosticator Maintains His Buy Recommendation

Another key factor driving the recent increase in Amazon’s stock price is the price target boost by UBS analyst Lloyd Walmsley. 

Walmsley raised his fair value estimation for Amazon to $180 per share, citing the company’s decision to insert commercials into content delivered through its Prime Video streaming service. He believes that these ads will significantly contribute to Prime Video’s revenue and boost Amazon’s profit margins. Walmsley also increased his estimate for the total 2024 Amazon ad revenue to $55.8 billion from $52.7 billion.

Amazon’s stock analysis in no way impugns a tech company that has consistently delivered impressive financial results and positioned itself as a leader in multiple industries. 

While Amazon has enjoyed overall positive performance, it has not been immune to market volatility. Like many other stocks, Amazon’s share price experienced fluctuations in response to macroeconomic factors, industry trends, and company-specific news. Investors should be aware of these potential risks and understand that short-term volatility does not necessarily reflect the long-term prospects of the company.

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