Goldman Sachs says Amazon’s stock will surge 20% from current levels, making it the new biggest bull on Wall Street

  • In a note published Thursday morning, Goldman Sachs raised its Amazon price target to a street high $2,900, implying 20% upside from current levels.
  • Goldman sees the e-commerce giant reporting first quarter earnings “well above consensus expectations on revenue and profitability, while guiding 2Q above consensus on both metrics.”
  • Goldman thinks the increase in demand Amazon is experiencing in retail, AWS, and its ads business will steepen the company’s long-term growth rate if it is able to meet the challenges of this demand in the midst of a global pandemic.
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In a note published Thursday morning, Goldman Sachs raised its Amazon price target to a street high $2,900, implying 20% upside from current levels.

Goldman thinks the e-commerce giant will sail past first quarter earnings estimates when it reports next week, and will give second quarter guidance that is well above consensus estimates on revenue and profitability. The bank expects the increases to be driven by a surge in demand in several of the company’s businesses.

“The increase in demand the company’s retail, AWS, and ads business is seeing and Amazon’s ability to meet the challenges of this demand, will, we believe, serve to steepen the curve of its long term growth rate, drive incremental profitability, and further deepen the competitive moat around all of its business,” Goldman wrote.

The bank noted that while Amazon’s stock has significantly outperformed year-to-date, it believes that “the market continues to underestimate the long term value of the Amazon platform as the leader in both the movement of retail online and compute into the cloud, the realization of which is being accelerated by the current crisis along with consumer and enterprise adoption.”

Goldman derives its $2,900 price target from a sum-of-the-parts valuation. The bank assigns a near $800 billion valuation to AWS, making it the most valuable segment of Amazon’s business.

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The analyst note comes on the same day it was reported that Jeff Bezos would be returning to the day-to-day management of Amazon after years of solely focusing on high-impact projects like Alexa.