Amazon stock topped the $1,000 mark on Tuesday, a milestone that directly reflects its incredible rise. Some are now wondering if its next plateau is $2,000 per share.
Wall Street analysts are extraordinarily bullish, with just one brokerage keeping a “hold” label on the stock and none with “sells” showed an online research firm.
Several of the more optimistic brokerages have shares reaching as high as $1,250 during the upcoming 12 months.
Amazon shares have now increased 38% over the last 12 months and are 14 times the value they were 10 years ago. However, momentum is not forever as Apple shareholders faced a couple of years ago.
The largest threat to the company is competition that is approaching in its rearview mirror, said analysts. In part, due to the willingness of Jeff Bezos the founder and CEO to continually reinvest in new areas and research, the company held a huge first mover advantage for both web services and retail. However, that is changing now.
Amazon remains the leader but there is intensification in competition said an analyst on Wall Street.
Amazon in effective is two different companies. One is an e-commerce retail company that is building its global marketplace while the other is a cloud services and storage company that has accounted for the largest share of the consolidated operating income of the company during the 2017 first quarter, which out did the retail profits.
For its retail, its big rival Walmart is the biggest roadblock to continued growth at Amazon. Determined to enter deeper into e-commerce and with the advantage of a huge base of brick and mortar stores, Walmart is becoming more and more dynamic, said one analyst.
Walmart has put a great amount of focus on its efforts to attract middle income consumers. In contrast, Amazon has made strong inroads with the upper- as well as upper-middle class consumer.
The analyst said more middle-income consumers will move into the e-commerce marketplace and very few have any loyalty to online giant Amazon.
With the enormous Walmart distribution and logistics network, and the acquisition it made of Jet.com the e-commerce site in 2016, they could start to take some business away from Amazon, a New York based analyst said.
The upside with Amazon is there is still a large amount of market to enter into. One financial analyst estimates that while spending online currently in the U.S. is approximately 15% of the overall retail market, it may increase over the long run to more than 30%.