Amazon (NASDAQ:AMZN) is one of the best growth stories in the stock market. Since debuting as a public company in 1997, Amazon stock is up more than 236,000%.
That’s a ridiculous rate of return. And if you didn’t get in on Amazon stock in its early days, you may very well be moved to tears when you think about the profits that you’ve missed.
Now trading at $3,330, Amazon is coming off a spectacular 2020 in which Amazon stock jumped more than 73%. Can investors expect any more from Amazon as it heads into his fourth-quarter and full-year earnings report next month?
Analysts seem to think so.
Amazon Stock Is on a Hot Streak
Just a couple of weeks ago when I last wrote about Amazon stock, I wrote that I think the company’s shares are fairly priced as it heads into its earnings report.
The stock was at $3,165, down from an all-time high of $3,531.45 in September, when I wrote those words. But I felt good about my advice, and I still do. To sum up, here’s what I said then.
Do the math and Amazon stock seems like a no-brainer. Just don’t wait too long.
Amazon rose more than $200 per share since that article was published, and there’s every indication that there’s more to come.
Some cases in point:
- Bank of America analyst Justin Post raised his company’s price target on Amazon stock from $3,650 to $4,000 per share, calling it “still the one to own long-term.” That’s a cool 21.2% upside for Amazon – and that’s after it’s already provided huge returns in 2020.
- Credit Suisse analyst Stephen Ju raised his company’s price target on AMZN from $3,750 to $3,860 and kept and “outperform” rating on shares. If Ju is right, Amazon stock has 17% upside. That’s more than respectable.
- Amazon is also on my own list of mega-cap stocks to buy right now. It tops my recently published list of companies with strong foundations.
A Growth Engine For Your Portfolio
Amazon has too many things going for it to suffer for long. It’s the top e-commerce stock in the United States, and that was even before the novel coronavirus pandemic pushed online shopping to the forefront.
Amazon Prime Day, which was a two-day event in October, reportedly did $10.4 billion in sales, which would be a 45.2% increase from 2019. Small- and medium-sized businesses saw 60% year-over-year increases in Prime Day sales, topping $3.5 billion.
When Amazon reports Q4 numbers next month, it’s expected that Black Friday and Cyber Monday sales numbers will also be through the roof. Amazon has already said that Cyber Monday was the biggest shopping day in the company’s history.
And then there’s Amazon Web Services, which is the company’s cloud-computing segment. AWS recorded sales of $11.6 billion in the third quarter, which was up 29% from the previous year. AWS is the primary driver of Amazon profits, with more than 30% of the cloud storage market.
The Bottom Line
Two weeks ago, I suggested that buying Amazon stock at its current prices seemed like a no-brainer. The company has a massive growth history and it’s a leader in e-commerce, cloud storage, streaming, AI and more.
If you had bought and held $1,000 in Amazon stock at its IPO, you’d be a millionaire now. But that’s not to say its too late to get on board this powerhouse of a stock.
All indications are that Amazon is going to post massive Q4 and full-year numbers when it has its earnings report in early February. There’s also every reason to believe that Amazon will continue its growth story into 2021, as analysts are already falling over each other to raise their price targets for Amazon stock.
There are no sure things in investing. But when you look at Amazon stock, there are far too many good things to ignore.
Amazon stock continues to have an “A” grade and a strong buy recommendation in my Portfolio Grader.
On the date of publication, both Louis Navellier and the InvestorPlace Research Staff member primarily responsible for this article held long positions in AMZN.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
