BofA Securities analyst Justin Post has given Amazon.Com Inc (AMZN) a Buy rating, boosting the stock’s outlook with a price target of $210. This upgrade follows the announcement of a strategic partnership between Oracle Corp (ORCL) and Amazon Web Services (AWS). This collaboration seamlessly connects Oracle’s Autonomous Database & Exadata Database with AWS applications, offering AWS customers enhanced access to their data, simplified database management, streamlined billing, and unified customer support. This strategic alliance signifies a powerful move for both companies.
Post highlights the competitive landscape between Oracle and Amazon in the database market. However, this partnership demonstrates a significant opportunity for cloud providers to tap into the demand for infrastructure and applications utilizing data stored within Oracle’s databases. According to Oracle, partnerships with leading cloud providers are already driving substantial growth.
Adding to the positive sentiment, AWS CEO Matt Garman expressed optimism about the potential of artificial intelligence (AI) during an investor conference. Garman emphasized the strong demand for AI and highlighted AWS’s differentiated infrastructure as a key driver of client wins. Despite concerns about AI disrupting AWS’s dominant position in the cloud industry, Post believes Garman’s comments reflect a positive outlook on AI-driven demand and AWS’s ability to leverage its unique AI infrastructure to secure client success.
While Amazon is navigating the delicate balance of promoting its cost-efficient infrastructure and showcasing the powerful capabilities of Nvidia Corp’s (NVDA) GPUs, Post emphasizes the importance of customer choice as a key differentiator. This approach is seen as a compelling offering that attracts a wider range of clients.
The price target set by Post is based on a Sum Of The Parts (SOTP) analysis. This method values Amazon’s various business segments individually, including:
* 1P retail business: 1.2 times 2025E Revenue (incorporating subscription and Prime membership fees)
* 3P retail business: 3.0 times 2025E Revenue
* AWS: 8.0 times 2025 Sales
* Advertising business: 5.0 times 2025 Sales
For 2025E, Post’s 8.0 times multiple for AWS is slightly lower than the analyst’s SaaS comps at 8.5 times. Similarly, his 1.2 times GMV multiple is a discount to his retail comps at 1.3 times, and his 5.0 times advertising multiple is also a discount to his digital advertising comps at 5.2 times. These discounts are considered warranted due to growth rates exceeding those of competitors.
Oracle Stock Prediction for 2024: While earnings growth and fundamental research are standard tools for valuation and forecasting, many traders rely on technical analysis to create predictive models for share price trends. One approach involves analyzing trends to anticipate future stock price movement. For Oracle, investors can gauge long-term prospects using a moving average and trend line. If a stock consistently remains above its moving average, often considered a bullish signal, investors can extrapolate this trend into the future using a trend line. Benzinga Pro reports that Oracle’s 200-day moving average is currently at $123.04, below the current price of $156.09. Traders believe that a stock trading above its moving average is generally a positive sign, while crossing below it indicates a more negative outlook. Trend lines can be used to make educated guesses about future stock prices, assuming stable market conditions.
Price Action: AMZN stock saw a 2.54% increase, closing at $179.86 on Tuesday.
