U.S. Markets closed

Goldman Sachs boosts its Amazon price target to $2,000

Goldman Sachs boosted its 12-months price target for Amazon’s (AMZN) stock to $2,000, up from $1,825, after the e-commerce giant reported blow-out first-quarter earnings results.

“We are in the sweet spot between Amazon investment cycles where new fulfillment/data centers are driving accelerating revenue growth while incremental capacity utilization is driving margin expansion,” Goldman analysts wrote. “Higher level, we still remain in the early stages of the shift of compute to the cloud and the transition of traditional retail online and, in our opinion, the market is underestimating the long-term financial benefit of both to Amazon.”

On Thursday, Amazon reported significantly stronger-than-expected results, posting earnings per share of $3.27 on revenue of $51 billion. Analysts had been expecting $1.27 per share on revenue of $49.96 billion. The results were driven by strong gains from Amazon’s cloud-computing business, Amazon Web Services (AWS).

An Amazon.com Inc driver stands next to an Amazon delivery truck in Los Angeles, California, U.S., May 21, 2016. REUTERS/Lucy Nicholson/File Photo

Amazon, which recently revealed that it had more than 100 million paying Prime subscribers, also announced plans to increase its membership from by $20 to $119, up from $99 per year. 

Amazon’s stock was last trading 4% higher on Friday. The tech giant’s shares hit an all-time high of $1,638.10 during intra-day trading. Since January, the shares are up more than 34%.

A $2,000 share price would give Amazon a market cap of $969.94 billion, putting it in contention to hit the elusive $1 trillion market cap. Amazon’s present market cap is $765.36 billion, behind Apple’s (AAPL) $821.53 billion market cap and ahead of Alphabet’s (GOOGL) $715.61 billion.

Morgan Stanley has a $1,700 price target on Amazon. But their bull case scenario places a $2,600 price target.

“Adjusting our model, we raise ‘18/’19 CSOI by 16%/9% and our sum of the parts based PT to $1,700 (from $1,550). Our Bull Case, which uses a five-part sum of the parts looking at AMZN’s 1P,3P, AWS, Subscriptions and Advertising/Other business, goes to $2,600 (from $2,200) with 71% upside, largely driven by outperformance from AWS but also in part by advertising and subscription,” the Morgan Stanley analysts wrote.

Elsewhere on Wall Street, other analyst groups boosted their price targets, with Credit Suisse raising its target to $1,950 from $1,800 and UBS increasing its target to $1,830 from $1,760.

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.