Amazon Nears Record Amid Wall Street Praise for Prime MilestoneBy
Amazon.com Inc. shares gained as much 2.7 percent intraday, putting the online retailer within approximately 3 percent of its March 12 record-high after founder/CEO Jeff Bezos drafted a letter to shareholders touting the company surpassing more than 100 million users with paid Prime memberships. The jump comes in an otherwise sour day for “FAANG” stocks. The letter was met with a warm response from Wall Street.
For a consumer-friendly Amazon, the achievement is a "material positive" as Prime members spend nearly double that of a non-member each year, wrote Aegis Capital analyst Victor Anthony. Though it took 13 years from when Amazon Prime debuted in 2005 to reach the milestone, Anthony predicts the e-commerce behemoth will reach 150 million subscriptions within the next three years, especially with the help of its annual Prime Day.
BofAML’s Justin Post puts Prime memberships at 137 million by year end in his forecasts, as video streaming continues to drive new users and retain the existing ones. The positive response from Wall Street seems to resonate with investors as shares edge closer to new highs -- it also accounts for the most positive index points in an otherwise down day for the S&P 500.