Actions of Amazon (NASDAQ:AMZN) The stock soared on Tuesday, gaining as much as 4.5%. As of 2:10 p.m. ET, the stock was up 4.1%.
There were a few catalysts that sent the e-commerce Titan is on the rise. One of them is the result of an optimistic position taken by a Wall Street analyst; the other is the unexpected gain on one of his investments.
The best choice
Analysts at Bank of America Amazon remains their top pick among large-cap and FAANG stocks in 2024, according to online investing publication The Fly. Analysts maintained their buy rating on the stock while increasing their price target to $220, up from $210. This suggests potential gains for investors of 18%, compared to Tuesday’s closing price.
Analysts noted that Amazon has significant potential to improve efficiency this year. Despite progress in 2023, Amazon remains below 2018 levels when measured using a number of logistics utilization metrics tracked by the investment bank. Although the rebound in digital retail has been the main driver so far this year, margin expansion could be another step higher.
The other catalyst that pushed Amazon higher today was the company’s investment in Rivian Automobile (NASDAQ:RIVN). Amazon owns more than 162 million Rivian shares, representing a 16.4% stake. The electric vehicle (EV) maker was weighed down by results that weren’t as good as Wall Street expected and by a general slowdown in the electric vehicle market. As a result, Rivian stock has recently fallen 69% from its all-time high reached late last year.
However, Rivian announced that it would form a new joint venture with Volkswagen AG, including an investment of up to $5 billion. Rivian stock jumped more than 20% on the news (as of this writing), which increased the value of Amazon’s stake in the company by approximately $415 million.
Is it time to buy?
Amazon shares are on fire, up more than 50% over the past year. Investors are optimistic about the rebound in online retail, the company’s foray into artificial intelligence (AI) and its resurgent growth in the cloud.
With less than 3 times forward sales, Amazon presents an attractive price, especially in light of its multiple growth drivers.
Should you invest $1,000 in Amazon right now?
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena has positions at Amazon. The Motley Fool holds positions and recommends Amazon and Bank of America. The Mad Motley has a disclosure policy.
Why Amazon Stock Broke On Wednesday was originally published by The Motley Fool
