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Amazon Shares Fly to Over $2,000 After Morgan Stanley Raises its Price Target

Amazon Inc. hit a milestone recently, soaring over $2,000 a share as the e-commerce giant received one of the heftiest price targets on Wall Street.

The stock soared as much as 1.4% to hit an all-time new intra-day high of 2,025.57 on August 30th.

Morgan Stanley has raised its price target on Amazon from $1,850 to $2,500, predicting a $1.2 trillion evaluation. According to FactSet, it is the highest price target on Wall Street out of 41 analysts who are covering the stock.

With 487,741,189 common shares outstanding as of July 18, according to Amazon’s most-recent 10-Q filing with the SEC, Amazon’s market cap reached $987.95 billion at the intra-day high on Thursday.

The company is inching closer to becoming the second company to top a $1 trillion market cap. The first was Apple not too long ago.

According to Morgan Stanley analyst Brian Nowak, “We have increasing confidence that Amazon’s rapidly growing, increasingly large, high margin revenue streams (advertising, AWS, subscriptions) will drive higher profitability and continued upward estimate revisions.”

According to Nowak, the company’s high profit margin businesses such as Amazon Web Services cloud computing, subscriptions and advertising will generate nearly $45 billion in profit by 2020 from an estimated $25 billion this year.

MoffetNathanson analyst Greg Melich has also raised his price target to $2,100 and reiterated a “buy” rating.

Melich highlighted the potential of Amazon’s cloud business AWS to gain market share and expand profitability.

He wrote, “We are often asked, is Amazon a retailer, a tech company, or a budding media juggernaut? The answer is all of the above.”

He also wrote, “As Amazon approaches that [$1 trillion] milestone their market cap could exceed 5% of [gross domestic product]. If society decides Amazon is too big, the off ramp could be splitting AWS from Amazon Retail. Given the distinct business that it is quickly becoming, it might prove positive for shareholders and society.”

Shares of Amazon have soared 71.5% YTD. Founder and Chief Executive Jeff Bezos continues to get richer. He owns 885,140 Amazon shares as of Aug. 14, according to a recent SEC filing. Bezos is already the world’s richest person according to the Bloomberg Billionaires Index.

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