Nothing Can Stop Amazon Stock
Amazon.com, Inc. (NASDAQ:AMZN) shows no sign of slowing. On October 12, the company announced it will move into the corner-store business. Amazon may also build physical bookstores in select towns. (Source: “If you build it they will come’: Amazon takes on the corner store for commuters and convenience,” The Drum, October 11, 2016.)
Amazon stock was down slightly: 0.57%. But this is a temporary blip, reflecting an overall bad day on Wall Street as investors are once again fretting over the Fed’s interest rate hike quandary: will she or won’t she (Janet Yellen)?
For those of you who are Amazon fans, don’t fret. Amazon stock is trading at a record high. It has simply been unstoppable in 2016. All indications are that the bullish course will continue. Amazon made $107.0 billion in 2015. In other words, it has doubled its revenue in just four years.
As of a year ago, AMZN stock has practically doubled. But the company has so many initiatives on the go to boost growth that it’s not hard to imagine that Amazon shares will continue to rise in 2017 at a similar or even faster pace. The retailer’s entry into the small grocery business with actual brick-and-mortar stores can add more revenue with little risk. It simply does not represent its core activity. So, in the unlikely event that it fails, Amazon can simply pack up and leave, without leaving its tail behind.
Amazon.com Is About Growth and Expansion
Amazon is also planning, no longer just considering, the introduction of drone deliveries in select markets where safety and regulations make it feasible. Like it or not, there is no stopping Amazon. Analysts could not be more bullish, as the company continues to set and exceed targets. Indeed, if Amazon’s current hiring needs are an indication, 2017 could see an even greater revenue surge than 2016.
Translated to the stock market, an AMZN stock target price of $1,300.00–$1,500.00 is well within reach by the end of next year. Indeed, investors might not be delusional to expect AMZN stock to hit $1,600.00! In fact, Bill Miller, chief investment officer at LMM Investments, suggested that AMZN could hit $1,500 by 2019, last month when shares were at $740.00 or so. Not a month later, they are at $830.00-$845.00. (Source: “Amazon shares could double in three years, Bill Miller says,” CNBC, September 13, 2016.)
AMZN Stock at $1,500 Is feasible and Likely
Miller might be wrong, but only insofar as his target date for AMZN stock at $1,500.00 might be too conservative. Certainly, Amazon is expecting a surge of activity and revenue as never before. This is what can be concluded after Amazon.com announced that it plans to hire 120,000 seasonal employees in the United States for year-end holidays, expecting a surge of business and customer service needs. (Source: “Amazon to hire 120,000 temporary workers for holiday season,” Reuters, October 13, 2016.)
Last year, Amazon hired 14,000 seasonal positions. The company expects more demand this year, so high as to need about 90% more workers. (Source: Ibid.)
By contrast, many of its brick-and-mortar competitors, like Macy’s Inc (NYSE:M), will be hiring fewer workers for the holiday season. Amazon stock has only been restrained by overall market sentiment in the past few days, because if any more evidence were needed about its ability to crush competitors, its standalone video streaming service has dealt a heavy blow to Netflix, Inc. (NASDAQ:NFLX).
Amazon has been untypically kind by not insisting on simultaneous theatrical and home releases like Netflix. (Source: “Netflix’s Rough Day: Stock Hit Hard As Amazon Throws Down,” The Wrap, April 18, 2016.)
Only Wal-Mart has revenues that can compete with Amazon (about $486.0 billion as of fiscal 2014). But Amazon is catching up faster than anyone could have expected. That’s why Amazon stock, after a stellar 2016, could see an even better 2017.