Bernstein analyst Mark Shmulik lifted his rating on Amazon to 'outperform' from 'market perform', arguing the group will continue to increase its dominant position in online commerce -- it has a 20% hold on U.S. online sales at present -- even as consumers return to physical stores in the autumn months, thanks in part to its investments in one-day shipping and its growth in the food and grocery market.
Cloud computing and advertising, the second and third of the group's three major revenue pools, were also citied as positives for near-term performance.
Digital commerce has “permanently inflected”, Shmulik said, while the pandemic has "pulled forward secular trends, from e-commerce to digital advertising and Cloud, with Amazon as a primary beneficiary across all three revenue pools."
Amazon shares were marked 3% higher in early trading Tuesday to change hands at $3,045.00 each, extending their six-month gain to around 60% and giving the Seattle, Washington-based tech giant a market value of around $1.53 trillion.
Earlier this month, Amazon said it will expand the square footage its devotes to its global distribution network by around 50% this year, or 130 million square feet, a figure that nearly matches the combined expansion of the past three years.
Amazon posted record second quarter profits in late July, on sales of nearly $90 billion, even as COVID-related costs jumped to $4 billion, including cleaning supplies and protective gear for its drivers and warehouse workers, and $700 million more linked to wage increases.
Amazon is also looking to hire another 250,000 worldwide employees to handle the surge in online demand triggered by coronavirus lockdowns.