Here are five big numbers that show Amazon AMZN +0.7%’s explosive growth during the pandemic which has hurt much of the retail world.
That’s how much Amazon’s market capitalization has gained so far in 2020. At the start of the year, the e-commerce giant sported a valuation of around $920 billion. After the stock bounced back from the coronavirus market sell-off in March and hit new record highs, the company is now worth $1.49 trillion. That makes Amazon one of the largest companies in the world, trailing only Microsoft MSFT -0.6%, worth $1.54 trillion, and Apple AAPL -0.2%, worth $1.61 trillion.
Amazon’s stock has increased by more than 60% this year and now trading at around $3,000 per share. It bottomed out at around $1,600 in mid-March as the stock market plunged amid widespread business shutdowns due to the coronavirus pandemic. The stock has since roared back from its March low, closing above $3,000 per share for the first time on July 6. There are several reasons to explain the stock’s “meteoric rise,” according to Morningstar MORN +0.1% analyst R. J. Hottovy. “Heightened Prime member engagement (especially for online grocery services)” and strong usage rates for its cloud business, Amazon Web Services (AWS). Morningstar assigns the stock a fair value estimate of $2,750 per share.
Bezos, who currently owns an 11.1% stake in Amazon, has seen his net worth surge by more than 50% so far in 2020. He is the world’s richest person: Forbes estimates his net worth at $178.5 billion, up from $114.7 billion at the end of 2019. The second richest person is Microsoft co-founder Bill Gates, with a net worth of $113 billion.
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That’s at least how much revenue analysts are expecting from Amazon when it reports second quarter earnings next week on July 30. But Morningstar says (as is the case with many big tech stocks today), the market has moved back to a “growth-over-profitability” mindset when it comes to Amazon. The company is expected to report at least $4 billion in coronavirus-related expenses, which could pressure the company’s operating profits, according to Hottovy. Since April, Amazon and Bezos have faced backlash over inadequate safety and working conditions amid the coronavirus which had led to worker protests. The company has since pledged to spend more money on revamping health and safety protocols in the workplace.
$3,800 per share
Analysts at investment firms Jefferies and Goldman GS -0.8% Sachs have both raised their Amazon price targets to $3,800 per share. That’s the highest estimate on the Street. Both firms cited Amazon’s booming e-commerce business—including sustained online sales growth in North America—and large potential upside from its growth in its cloud segment, AWS. According to Goldman analysts, data from Mastercard MA -1% indicates that Amazon’s e-commerce segment grew by 93% year-over-year in May.