The Amazon stock forecast was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Summary

• I reiterate the buy rating I gave AMZN last February 27. Back then, I gave it a 1-year price target of $2,500.
• I am now raising my price target to $3,000 for this amazon stock forecast. The COVID-19 tailwind is still extraordinarily strong for AMZN.
• The $1.2 billion recent purchase of self-driving car company Zoox is a future growth driver for Amazon. 
• Going forward, Amazon Logistics can have future self-driving delivery cars and trucks that can cover most of North America.
• Aside from work-from-home, Amazon Web Services also has a tailwind from the learn-from-home education new normal.

Amazon’s (AMZN) stock was trading below $1,900 when I gave it a 1-year Amazon stock price prediction of $2,500. The COVID-19 pandemic tailwind boosted AMZN to record price of $2,796 last June 24. I am still endorsing Amazon’s stock as a buy. My new 1-year price target for AMZN is $3,000. The +44.10% 6-month price return of AMZN is also a good reason to take profits. However, Amazon Web Services has a new tailwind from online education or learn-from-home. It might be best to just buy more AMZN shares while they still trade below $2,800. 

My $3,000 price target is lower than SunTrust’s PT of $3,400 for AMZN. The probabilistic AI of Financhill is predicting that AMZN’s price can reach as high as $4,151.24 after 48 weeks. 

Why AMZN Has More Upside Momentum

Amazon Web Services or AWS is the most profitable business segment of Amazon. AWS is responsible for more than 70% of Amazon’s operating profits. The consistent profitability of AWS is why AMZN has stratospheric valuation ratios. Investors pushed AMZN to above $2,700 because AWS is reaping great benefits from the work-from-home new normal. Many companies are allowing their employees to work from their homes. This is to keep valuable employees safe from COVID-19.  

Companies and governments around the world are buying more AWS instances or web hosting to support their work-from-home operations. No thanks to COVID-19, I expect AWS to post a Q2 ‘20 revenue of $11.3 billion. If this prediction comes true, bulls will again push AMZN above $2,800 by late July or early August. If AWS delivers $12.3 Q3 ’20 revenue, AMZN’s stock could breach $2,900 by late November. 

Why AMZN Stock is a Buy

My $12.3 Q3 ’20 AWS revenue estimate is feasible. Governments around the world are mandating public and private education administrators to offer online or distance education only for school year 2020-2021. Pres. Duterte will not allow schools, colleges, and universities in the Philippines to do regular face-to-face classes this year because there still no universal cure or vaccine against COVID-19. The AWS Educate cloud platform for online education can service K-12 students and college enrollees. AWS Educate can also cater to companies who want to train their employees with new skills.

AMZN is a buy because this ongoing pandemic is boosting the $187.88/year global online education industry. No thanks to COVID-19, Research and Markets believes that the global online education business will enjoy a 9.23% CAGR. It will be worth $319.17 billion by year 2025. The long-term boost from AWS Educate is a good incentive for investors to keep buying more AMZN. The engine behind AMZN’s rising star will always be AWS. Amazon’s stock price will keep rising congruently to the revenue growth rate of AWS. AS per the chart below, it only took two years for AWS to double up its quarterly revenue. If you look back, AMZN’s average stock price in Q1 2018 was less than $1,500.  

The chart above also convinced me that this ongoing pandemic is boosting the online e-commerce and subscription service businesses of Amazon. Like it was for Q1, I again expect year-over-year revenue gains for Q2 ’20 from Amazon’s Online Stores and Subscriptions segments.

AWS persists as the no. 1 in cloud computing infrastructure services. The inability of Microsoft (MSFT) and Google (GOOGL) to steal the crown of AWS in cloud computing infrastructure is why AMZN is now trading above $2,700. The decades-long leadership of AWS will only get stronger as Amazon becomes the go-to solutions provider for online education/skills training. 

Final Thoughts

The recent $1.2 billion purchase of self-driver car company Zoox also fortified Amazon’s long-term prosperity. Going forward, the first benefit from Zoox is that Amazon Logistics will eventually have self-driving delivery drones, planes, cars, tricycles, cargo trucks, and cargo ships. The autonomous driving technology of Zoox can help Amazon reduce its growing shipping and fulfillment expenses. The elimination of human drivers in e-commerce delivery vehicles can lead to billions of dollars in savings.

The other future reward from Zoox’s acquisition is that it could be used as a platform for AWS as the ultimate self-driving car management system. Zoox can also produce self-driving cars for rent to businesses who also need autonomous cars for logistics purposes. AWS will then provide the cloud computing infrastructure for this autonomous goods transport system. 

My persistent optimism for AMZN is also due to its super-bullish one-year amazon stock forecast score from I Know First. A stock only needs to score 100 to get a clear buy signal. I Know First gave AMZN a trend score of 471.07. 

Past I Know First Success with Amazon Stock Forecast

On April 4, 2020, I Know First made a bullish Amazon stock forecast. The one month forecast came with a signal of 2.18 and predictability of 0.37. Looking at the chart below, AMZN stock rose 40.30% since this prediction and continues the surge in accordance with the corresponding 3-months prediction above.

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