Tech Stocks Rebound on Amazon's Most Bullish Call to Date
Just one day after witnessing one of their toughest trading periods in months, several major tech stocks—including Apple AAPL, Alphabet GOOGL, Facebook FB, and Amazon AMZN—rebounded slightly on Thursday morning.
The rebound comes on the back of several positive notes related to the ecommerce and cloud computing dominance of Amazon.
Analysts at D.A. Davidson reiterated their “buy” rating for the stock and raised their price target to $1,500 from $1,300, representing a nearly 30% upside to Wednesday’s close. The firm’s target is the highest out of the 41 analysts who cover Amazon, according to FactSet and CNBC.
“We are focusing on the company's physical store efforts as we believe its increased physical footprint… is THE story of its 2017 holiday sales and an indication of things to come in the future as Amazon increasingly leverages physical stores to increase its revenue growth and wallet share,” wrote D.A. Davidson’s Tom Forte.
Meanwhile, JPMorgan reiterated its “overweight” rating for Amazon, and MKM Partners reaffirmed its “buy” rating and raised its price target to $1,350 from $1,275.
“We continue to think Amazon is the best long-term growth story available to large-cap investors today,” wrote MKM analyst Rob Sanderson.
Shares of Amazon gained more than 1.2% in morning trading hours Thursday, helping the stock recover nearly half of the value it lost during Wednesday’s tech selloff. Elsewhere, Apple shares gained about 0.5%, Facebook popped over 1%, and Alphabet gained about 0.25%.
The tech-heavy Nasdaq Composite Index was up nearly 0.6% on Thursday morning, leading the major indexes and signaling that the tech rally might still have some life left in it. Other notable tech stocks on the rebound today include PayPal PYPL, Netflix NFLX, Square SQ, and Nvidia NVDA.
Wednesday’s selloff is likely attributable to end-of-the-month fund rebalancing, which could have included a slight shift away from tech. A strong Q3 earnings season for several industry behemoths might have inspired some profit taking, while increased geopolitical tensions may have forced some funds to move money into more “tried-and-true” sectors.
Indeed, investors have been keeping a close eye on North Korea this week, as Kim Jong-un’s regime conducted its first missile test in over two months on Tuesday. According to the Pentagon, the missile went higher than any previous North Korean tests, and Pyongyang officials later claimed that it now had the ability to reach the eastern seaboard of the United States.
Nevertheless, Wall Street remains confident that political initiatives on the domestic front will come to fruition soon. The GOP’s long-awaited tax reform bill made it out of committee on Tuesday and could see a vote on the Senate floor this week, while the confirmation process for President Trump’s Fed chair nominee, Jerome Powell, is expected to go smoothly.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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