“It’s all just working” was the meaningful comment provided by JP Morgan analysts regarding the web-sales company.
Amazon‘s shares reached $669.98 this Friday, signaling a 12 percent raise thanks to several business actions that have granted it complete authority regarding online financial matters.
A bright future for Amazon
Experts argue that although some of Amazon’s strategies were severely criticized, they seem to have come to fruition due to the results of their first quarter of 2016. Amazon’s main services include online retail sales on both a global and a local scale (where “local” refers to North America) and Amazon Web Services, which provides cloud services for digital endeavors.
All of these branches of Amazon displayed a significant increase in revenue; it is worth noting that Amazon Web Services was launched only 10 years ago and it managed to generate more profits than Amazon’s retail businesses.
The main reason suggested by analysts that is to credit for Amazon’s massive surge in profitability is its Prime loyalty program. Amazon Prime provides its members with special rates in delivery, TV content and digital media services for a relatively small sum of $99 per year.
Reportedly, Prime memberships have raised up to 50 percent over the last two years; and it is now able to be offered in both the United Kingdom and Japan, as it is expected to be implemented in other countries as well. The availability of Prime services differ depending on the country where the purchase is performed, but it is slowly growing as it includes more and more products with each passing period.
Amazon has been known to set a great deal of effort in developing their logistics and web services, including investing their net profits in new businesses. The company is known for its actions towards granting the best quality of customer service, along with low prices and a large selection of products, which allows for overall satisfaction to motor further purchases made through the online retail service.
Several firms have raised their price targets of Amazon’s stock index. BMO has set it to $800 from $700, JP Morgan to $915 from $822 and Goldman Sachs to $800 from $720, thus achieving a median target of $777.50 while taking into account other investment firms. This allowed Amazon to place itself just behind Apple and Google, being the three largest U.S.-based digital companies when it comes to net value, where both Google and Apple have failed to meet first-quarter expectations.
Source: Reuters