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Amazon stock extends rally as e-commerce sales are booming

Amazon stock extends rally as e-commerce sales are booming

Amazon stock (NASDAQ: AMZN) stock price upside momentum shows no signs of letting up as people are sticking to their pandemic habits. Ecommerce sales grew sharply last week despite easing social distancing policies.

Bank of America reported that e-commerce growth accelerated to +70% year over year in the last week, up sharply from +68% growth in the previous week. Bank of America claims the sharp sales growth in August is an optimistic indicator for Amazon and other e-commerce players. The bank says that upcoming sales events like Way Day and Prime Day would add to sales growth.

The world’s largest e-commerce company has aggressively been seeking to capitalize on increasing demand. This is evident from Amazon’s strategy of hiring thousands of new workers for technology, delivery, and other roles.

It has also been pushing third party merchants to improve their delivery timing. In an email to third party merchants, the online retailer suggested them to offer deliveries on Saturdays and meet one- and two-day delivery pledges.

AMZN, Inc. daily Stock Chart
Amazon stock price performance.

Amazon stock price is currently trading around an all-time high of $3,300 while market analysts expect further upside momentum in days to come.

Goldman Sachs analyst Heath Terry has provided a price target of $4,200 for Amazon stock, saying the improving adoption rate of e-commerce and cloud sets the stock up for outperformance “well beyond the current crisis.”

Cowen has provided a price target of $4,000 while Morgan Stanley sets a $3,800 target for Amazon stock. Both firms see strong future fundamentals for the largest e-commerce company.

Amazon has generated 40% year over year revenue growth in the latest quarter. Its second-quarter revenue came in around $88.9 billion. The market analysts expect further revenue growth for the third quarter, with consensus estimate stands around $92 billion.

The consensus estimate for earnings per share stands at $7.18. Meanwhile, the company has been investing aggressively in growth opportunities to capitalize on improving demand.

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