Key Takeaways:
- Amazon closed at $247.04, up 1.4%, outpacing the S&P 500's 0.81% gain.
- The company deployed 396 Leo satellites and launched Alexa+ Agentic Ads.
- AWS deepened its Anthropic partnership as AI infrastructure spending accelerates.
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Amazon gains 1.4% to $247 as satellite, AI bets stack up
Amazon.com rose 1.4% to $247.04, outpacing the broader market as investors weighed fresh bets on satellite broadband, conversational commerce and AI infrastructure.
"Amazon is holding a Zacks Rank of #2 (Buy) right now," the research firm said, citing upward estimate revisions over the past month.
The stock has gained 9.1% year to date and 11.1% over the past 12 months. Amazon trades at 27.5 times forward earnings, a premium to the Internet-Commerce industry average of 16.7 times. Analysts project second-quarter earnings per share of $1.82, up 8.3% from a year earlier, on revenue of $196.9 billion, a 17.4% increase.
The moves come as Amazon raises tens of billions of dollars in fresh debt to fund AI infrastructure, while some institutional investors including Steve Cohen have trimmed exposure in favor of other AI plays. The company's forward P/E of 27.5 reflects the premium investors are willing to pay for a diversified platform spanning cloud, advertising, retail and satellite communications.
The developments supporting the latest gains span three distinct businesses. Amazon confirmed the deployment of 396 Leo satellites, preparing to launch its own broadband internet service later this year. The company also introduced a new Alexa+ Agentic Ads format that enables shoppers to complete purchases directly within Alexa conversations. On the cloud side, AWS deepened its partnership with Anthropic, which is using AWS for high-profile AI deployments including a recent cybersecurity contract.
For the full fiscal year, analysts expect Amazon to report earnings of $8.86 per share on revenue of $826.36 billion, representing growth of 23.6% and 15.3%, respectively. The Zacks Consensus EPS estimate has moved 0.4% higher within the past month.
The stock's 1.4% gain on Wednesday outpaced the S&P 500's 0.81% advance and the Dow's 0.27% rise, while tracking close to the Nasdaq's 1.3% increase. Amazon's outperformance comes as technology stocks broadly have pulled back from recent highs, with the Invesco QQQ Trust down about 5% from its peak.
This article is for informational purposes only and does not constitute investment advice.