Amazon stock hits $3,000 as tech booms during pandemic

Amazon stock hits $3,000 as tech booms during pandemic

Last Monday, Amazon’s shares broke past the $3,000 ceiling, at an all-time record of $3,057.04, as reported by Deadline.

This also marks the first time that Amazon had a market value of $1 trillion. This puts it in the ranks of other tech giants such as Microsoft and Apple.

Giants undeterred by the pandemic

Despite the U.S. economy’s recession due to the coronavirus pandemic, CNN reports that tech stocks like Amazon have led a surprising rebound in the market from its low point in March 2020.

This is due to growth in earnings and strong sales. CNN goes on to say that this strength is likely due to the new reality of shifting to work-from-home (WFH) and shelter-in-place conditions.

Amazon became a symbol for certain companies’ ability to thrive during the pandemic. Deadline further says that even as many sectors have suffered in the wake of the COVID-19 crisis, tech giants like Amazon have strengthened their position in both societies and the global economies.

Along with Amazon are Apple, Microsoft, and Alphabet also climbing “slightly below” the all-time mark.

Amazon reportedly had strong earnings during the first quarter of the year. However, the tech giant stated that it planned to use any profit earnings in order to fund response measures to the coronavirus. As of this writing, Amazon’s shares rose 61%, and they are well ahead of Wall Street analysts’ price target of $2,803.75.

Amazon stock hits $3,000 as tech booms during pandemic

Pushing through

With Amazon’s shares climbing 5.8% last Monday, the tech titan’s e-commerce and cloud computing market capitalization had exceeded $1.5 trillion, according to The Motley Fool.

The online publication further emphasizes that a primary contributor to Amazon’s gains in share price comes from the positive economic news coming out of China, as Amazon’s third-party merchants have sourced their goods from Chinese manufacturers.

However, shipping delays due to the standstill in many sectors by the coronavirus have hindered these merchants, cascading to recent sales and profits of Amazon itself.

Another factor in driving Amazon’s stock to such impressive levels is its dominant position in not one, but two rapidly growing markets: namely, e-commerce and cloud computing.

Currently, Amazon controls the lion’s share of the online retail market in the U.S. and many other countries. As it stands, Amazon Web Services has become the leader in the global cloud infrastructure market.

These titanic industries combined are projected to generate $7 trillion in annual revenue by 2023 for Amazon. The question is, per Forbes, can the tech giant’s stock can still further grow after hitting the all-time high.

 

Images courtesy of  Xabier Cid, Tony Webster/Flickr

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