Amazon shares could soar higher with air cargo service taking flight
The e-commerce and technology giant could see its shares soar even higher as its Prime Air fleet preps for major expansion in a move that would create an air cargo service to rival UPS.
Amazon could see its shares soar even higher with the stage set for its Prime Air fleet to expand to about 200 planes in a move that would create an air cargo service capable of rivalling United Postal Service (UPS), according to a study released by DePaul University.
‘At a time when many other airlines are downsizing due to the pandemic, Amazon’s push for faster and cheaper at-home delivery is moving ahead on an ambitious timetable,’ said the report by DePaul University’s Chaddick Institute of Metropolitan Development. ‘Amazon Air’s robust expansion makes it one of the biggest stories in the air cargo industry in years.’
Amazon CEO Jeff Bezos launched Prime Air four years ago, with the air cargo service operating out of smaller regional airports located near to its warehouses with the aim of helping it move items to allow for one- and two day-delivery.
However, the e-commerce giant has invested $1.5 billion into a new facility based near Cincinnati which has the capacity for 100 aircraft taking around 200 flights each day. This new central hub is ‘a big deal’ and is crucial in Amazon moving to one-day shipping, according to Bezos.
Amazon still has a long way to go to before it has an air cargo service on par with UPS and FedEx but with the airline industry in turmoil, aircraft prices are sliding, making it the perfect time for Bezos to expand his fleet and his position in the overnight delivery services sector.
Amazon eyes driverless car start-up Zoox
Amazon is looking to acquire California-based driverless car start-up Zoox in a deal that could accelerate its automotive vehicle ambitions.
The deal is valued below its latest valuation of $3.2 billion based on its latest funding round in 2018, with the company receiving significant interest since its last capital raise from buyers, according to the Wall Street Journal.
‘Zoox has been receiving interest in a strategic transaction from multiple parties and has been working with Qatalyst Partners to evaluate such interest,’ the driverless car start-up said in a statement.
Analysts upbeat about Amazon
Amazon shares have climbed more than 25% year-to-date, outperforming the broader market with the S&P 500 down 7% over the same period.
Analysts believe Amazon shares could climb even further, with the company well-positioned to expand its presence in existing and new markets due to the shakeout brought about by the Covid-19 crisis which has wreaked havoc on the airline industry in particular.
Of the 45 analysts offering 12-month price forecasts for Amazon the median target sits at of $2700, with a high estimate of 3000 and a low estimate of 1840. The median target price implies a potential upside of 12.5%.
How to trade stocks with IG
Looking to trade Amazon and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:
Create an IG trading account or log in to your existing account
Enter ‘Amazon’ in the search bar and select it
Choose your position size
Click on ‘buy’ or ‘sell’ in the deal ticket
Confirm the trade
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
