What happened
Shares of Amazon (AMZN +1.25%) rose on Friday morning, adding as much as 2.9%. As of 11:06 a.m. ET, the stock was still up 2.2%.
The catalyst that sent the e-commerce platform higher was increasing bullish sentiment by several Wall Street analysts.
NASDAQ: AMZN
Key Data Points
So what
Amazon's annual "Christmas in July" sale is in the rearview mirror, and while details are sketchy, Prime Day appears to have been a success. In a press release yesterday, the company said it "was the biggest Prime Day event ever." In keeping with tradition, Amazon released numerous highlights about the sale, without actually revealing sales figures. In the wake of Prime Day, several Wall Street analysts dropped bullish research notes, suggesting that the tide of negative sentiment toward the digital retailer may be changing.
Morgan Stanley analyst Brian Nowak put pen to paper and estimates that Prime Day revenue grew to $4.6 billion, up 19% year over year, roughly 12% above his previous forecast. If that number holds, it would represent an acceleration compared with 8% sales gains for last year's Prime Day, increasing Nowak's confidence that revenue will accelerate in the third quarter. The analyst maintained his buy rating and price target of $175, which represents potential gains for investors of 58% compared with Thursday's closing price.
Evercore ISI analyst Mark Mahaney came to a similar conclusion, estimating Prime Day generated $4.4 billion, which was "modestly better than we would have assumed." Mahaney maintained his buy rating and $180 price target, 62% above Thursday's close.
Now what
A successful Prime Day would go a long way toward restoring investor confidence in Amazon, which has waned in the face of difficult comps and slowing online sales growth.
For investors planning to hold for years rather than days of week, however, the future looks bright. The global e-commerce market is currently estimated at $3.3 trillion, but is expected to climb to $5.4 trillion 2026. Amazon continues its reign as the undisputed worldwide e-commerce leader, and it's well positioned to benefit from a market that still has plenty of growth ahead.
