Start the conversation
Not even a brutal market selloff can keep Amazon.com Inc. (NASDAQ: AMZN) down.
Here's the thing. This is no ordinary bear market, one defined as a 20% drop from the previous high.
It's the coronavirus panic that has most of the economy in a deep freeze.
As a result, physical retail stores are getting hammered. The U.S. Commerce Department says retail sales for March fell a seasonally adjusted 8.7%.
That's the biggest one-month decline since the agency began keeping records back in 1992.
And while Amazon definitely faced some supply chain issues, the King of E-commerce came through when the nation needed the tech giant's help the most. It delivered millions of packages to homebound families all across America.
With that performance under its belt, yesterday the firm's stock hit a record high – a feat that few stocks can match.
With that in mind, today I'm going to show you why my target price of $3,000 a share looks very conservative…
Responding to the Times
Now then, I think it's safe to say that Amazon is an elite stock for the record books. It boasts a market cap of nearly $1.2 trillion.
More to the point, it has performed better in this market than two other $1 trillion stocks. Both Microsoft Corp. (NASDAQ: MSFT), valued at $1.3 trillion, and Apple Inc. (NASDAQ: AAPL), valued at $1.2 trillion, remain off their recent highs.
Indeed, on Thursday Amazon hit a closing high of $2,400. The bellwether S&P 500 closed at just about break-even for the day, by contrast, and off just shy of 18% since hitting its high on February 19.
And it also stands in sharp contrast to brick-and-mortar stores.
Get Your Buy List Ready: This is a once-in-a-lifetime chance to get into great companies at historically low prices, so put these stocks on your buy list now…
Consider that Amazon plans to hire another 75,000 workers. That's on top of the 100,000 it already hired to meet surging demand for online sales during the coronavirus lockdown.
Consider that electronics retailer Best Buy Co. Inc. (NYSE: BBY) is laying off 51,000 hourly workers. The retailer had limited customers to delivery and curbside pickup only.
Yes, we're focusing on Amazon's great current performance. But there is much more going on here than meeting online demand, much of it behind the scenes.
The Endless Drive for Growth
Make no mistake; Amazon CEO Jeff Bezos just never quits looking for ways to add more growth. The idea is simple: continue to build investor value with high-margin growth that juices up the earnings per share.
Here are four examples of just what I'm talking about.
- In February 2019, it was the lead investor in electric-truck maker Rivian.
- It was also among the lead investors in a recent $530 million financing for Aurora Innovation, a self-driving auto startup.
- The firm invested just shy of $1 billion in 2018 for PillPack, moving in into the online-pharmacy business.
- And roughly a year ago, we learned it wants to launch a constellation of 3,236 satellites to beam down broadband Web access to much of the world.
Those kinds of deals don't generate the type of heavy buzz Amazon got when it bought upscale grocery leader Whole Foods in 2017. At a cool $13.4 billion, the price tag stood out.
But it's the quiet moves that have often made this such a well-run firm.
It's hard to believe in retrospect just what a big deal Bezos created with the 1-Click feature on September 12, 1997. That tech breakthrough helped Amazon pull away from a crowded online shopping field to become the undisputed leader.
Today, there are literally hundreds of thousands of goods you can buy through the portal. And Bezos was savvy in the way he kept adding more third-party merchants who could sell through the store.
Consider that Amazon now has more than 2 million vendors who use its storefront. Of those, some 100,000 each sold $100,000 worth of goods in 2018 alone. That's a total of $10 billion in gross sales for only the top 5% of those third-party sellers.
A Dynamic Outlook for Amazon Stock
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.