E-commerce leader Amazon ( AMZN ) announced a slew of new products and services at its annual cloud computing conference this week and also received its highest price target hike ever.
[ibd-display-video id=2994904 width=50 float=left autostart=true] D.A. Davidson analyst Tom Forte on Thursday raised his price target on Amazon to 1,500 from 1,300, a new Wall Street high and a 29% premium from where the stock currently trades.
Forte focused on Amazon’s growing physical footprint through its acquisition of Whole Foods, its partnership with Kohl’s ( KSS ) and 10 bookstores.
“We believe Amazon’s increased physical footprint (including 465 Whole Foods locations, around 10 bookstores, and its strategic partnership with Kohl’s) is THE story of its 2017 holiday sales and an indication of things to come as Amazon increasingly leverages physical stores to increase its revenue growth and wallet share,” Forte wrote in a note to clients.
Also raising his price target on Amazon on Thursday was MKM Partners analyst Rob Sanderson, to 1,350 from 1,275. He called Amazon the “best long-term growth story available” for investors looking at large-cap stocks.
Amazon shares were up 1.1%, near 1,174 during afternoon trading on the stock market today .
The price-target hikes comes as Amazon is presenting its new products and services to 43,000 attendees at its Amazon Web Services annual “re:Invent” conference in Las Vegas this week. Amazon on Wednesday announced five new machine learning services , in addition to a video camera for developers. Collectively, Amazon is delivering tools for developers to help them build, deploy and manage their own machine learning systems.
Machine learning is an application of artificial intelligence that provides systems the ability to learn and improve from experience without being explicitly programmed. Amazon also announced an expansion of database services on AWS.
“The 2017 narrative at re:Invent made it clear to us that AWS is focusing new innovation around three main areas: (1) databases, (2) machine learning, and (3) automation,” said a KeyBanc Capital Markets report by several analysts.
“While our conversations with customers suggest enterprises continue to shift to a multi-cloud strategy, the pace of AWS innovations, coupled with the breadth of cloud functionality, should continue to sustain high growth for an $18 billion cloud platform,” KeyBanc said in a note to clients.
IBD’S TAKE: Amazon is an IBD Leaderboard stock with a Composite Rating of 72 out of a possible 99. Amazon.com continues to score new highs, but it’s extended from a 1,083.41 buy point.
RBC Capital Markets analyst Mark Mahaney said AWS was releasing new cloud services at a “torrid pace,” similar to last year.
“AWS brought cloud computing mainstream and, while other tech platforms are investing aggressively to catch up, we believe AWS’s scale, technical prowess and product vision make it the clear industry leader.”
Mahaney has an outperform rating on Amazon and a price target of 1,200.
Baird analyst Colin Sebastian said in his research note Amazon is beginning to expand its offerings to make machine learning more easily accessible to businesses of all sizes, “which we view as a key driver of increased adoption and further expands Amazon’s competitive advantage.”
Amazon, in October, reported third-quarter results that crushed earnings views and topped revenue estimates as shares took off. Amazon said revenue from Amazon Web Services, rose 42% to $4.58 billion, with operating income of $1.17 billion.
Amazon, at re:Invent, also announced a new cloud-computing service aimed at helping developers build virtual reality, augmented reality and 3D applications that can run on mobile devices and manage a range of applications.
On Wednesday, Amazon said Cyber Monday was the single biggest shopping day in its history, with customers ordering “hundreds of millions of products.”
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