Busy Week for Amazon Ends With Stock Surge to Record Close

SEATTLE (The Seattle Times/TNS) -
(AP Photo/Reed Saxon, File)

Amazon.com’s market value has climbed $23 billion this week in the wake of positive analyst reports that point to continued growth for the world’s dominant online retailer.

Amazon shares closed up 1.2 percent at a record $886.54 Friday, and were up 5.8 percent from Monday’s opening price.

Amazon, the fourth-largest publicly traded company, is now worth about $423 billion. The stock surge has bumped CEO Jeff Bezos, the biggest shareholder in the company, to No. 2 among the world’s richest people, right after Microsoft founder Bill Gates.

The rise in market valuation caps a busy week for the company, which on Tuesday won a bidding war for Souq.com, a large e-commerce company based in Dubai and focused on the Arab world.

That same day, it opened two grocery pick-up locations in Seattle, the latest iteration in its bid to understand and eventually conquer the supermarket space. And on Wednesday Amazon closed Quidsi, a former rival it had acquired in 2011 but failed to turn profitable.

Friday’s jump in share price coincided with a report by Loop Capital Markets analyst Blake Harper, who started coverage of Amazon with a buy rating and a 12-month price target of $1,100.

Harper wrote that he expects the company’s sales to grow 20 percent on average over the next three years, as it proceeds with its speedy expansion both across geographies and new markets, such as streaming video, music, restaurant delivery and physical stores.

“We view the company as a giant optimization engine for physical and digital distribution, with an innovation philosophy that should enable it to succeed in multiple new markets.”

Harper said he expects Amazon Web Services, the division that rents out computing power and storage capacity, to be spun off into an independent company, with a possible price tag of $200 billion.

Stifel, another investment bank, earlier in the week raised its price target to $1,025 from $912, calling Amazon the “prime beneficiary of the carnage it has created” among traditional retailers.