Amazon (NASDAQ:AMZN) stock hit an all-time high of $194.8 on June 26, propelling its market value above $2 trillion. AMZN stock settled at $193.61 yesterday, recording a 3.91% gain and sporting a market cap of about $2.02 trillion.
Overall, Amazon stock is up over 27% year-to-date, outperforming the S&P 500’s (SPX) nearly 15% gain. Further, it joined the ranks of tech giants such as Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), and Microsoft (NASDAQ:MSFT) in the $2 trillion club.
Here’s What Drove AMZN Stock Higher
Amazon stock got a boost from the rally in the shares of EV maker Rivian Automotive (NASDAQ:RIVN). Rivian stock closed more than 23% higher on June 26 following the announcement of a joint venture with Volkswagen (VWAGY)(DE:VOW3). It’s worth noting that Amazon owns a significant stake in Rivian, over 16%. Thus, a rally in Rivian stock positively impacted Amazon’s valuation.
In another development, AMZN plans to ship low-cost items directly from Chinese warehouses to global buyers, reducing its delivery time. This should boost its competitiveness against Temu and Shein.
Adding to the positives, Bank of America Securities analyst Justin Post reiterated his Buy rating on AMZN stock. The analyst increased the price target to $220 from $210 on June 26. Justin Post is a 5-star analyst rated in the top 3% of the Street’s stock pros. While Amazon has already implemented several initiatives to drive earnings, Post sees further room for improvement.
Amazon Boosts Efficiency
Amazon has streamlined its infrastructure to drive efficiency. It has set up eight regional hubs that have reduced travel distances and operational costs. It managed to lower its global cost-to-serve per unit in 2023, marking its first decline since 2018. The cost savings enable Amazon to improve delivery speed, keep prices low, and expand its product range.
Looking ahead to 2024 and beyond, Amazon plans to improve its inventory management to achieve more cost savings.
Is Amazon a Buy or Sell Right Now?
The uptrend in Amazon stock reflects better efficiency, growth in its cloud business, and investments in AI. While the stock is up about 50% in one year, Wall Street maintains a bullish outlook.
42 analysts cover AMZN stock, and all recommend a Buy. AMZN stock sports a Strong Buy consensus rating. The analysts’ average AMZN stock price target is $221.55, implying 14.43% upside potential from current levels.
