Amazon still has plenty of room to run, according to two analysts.
Shares of the e-commerce giant rose 2.8% on Tuesday to $2,594.31 following two price target hikes to $3,000. Amazon's (AMZN) - Get Report stock is up 36% year to date amid heavier usage of e-commerce due to the COVID-19 pandemic. On Monday, both RBC and Baird raised their price targets on Amazon.
In a note on Tuesday, analysts at Bank of America wrote that an e-commerce "tidal wave" is coming in the second quarter, and raised their 12-month target for Amazon to $3,000 from $2,600 per share.
Overall e-commerce growth was up 83% in May, according to Bank of America, and recent positive disclosures from companies such as eBay and Walmart suggest that Amazon's e-commerce sales are due for a surge in the current quarter and second half of this year.
Bank of America forecasts that Amazon will deliver $85 billion in overall revenue in the second quarter, $6 billion above its prior forecast, and that its investments in fulfillment infrastructure will drive further upside in the holiday quarter. Bank of America maintains a Buy rating on Amazon shares.
Also on Tuesday, Wells Fargo analysts wrote that Amazon is poised to benefit from "exceptionally strong e-commerce demand in 2Q, likely extending into 2H20." Wells Fargo raised its price target for Amazon to $3,000 from $2725, and maintains an Overweight rating on Amazon shares.
A gradual return to on-site work and school in the coming months will likely "shift momentum back towards rapid delivery," Wells Fargo wrote, allowing Amazon to reap the benefits of its ongoing investments in one-day shipping.
Amazon told investors in its first quarter earnings release that it will plow virtually all of its profits into its COVID-19 response, which includes "productivity headwinds in our facilities as we provide for social distancing and allow for the ramp up of new employees," said Amazon CFO Brian Olsavsky.