The coronavirus pandemic has decimated investor value running into the trillions. Worse, it’s still not clear when normalcy will return.
Regardless of when lockdowns are lifted, investors are being advised to have Amazon (NASDAQ:AMZN) in their portfolio, according to Wall Street.
According to Goldman Sachs, the online retail giant is likely to outperform going forward.
Analyst Chris Hussey says Amazon is set to increase its market share as the coronavirus crisis unfolds:
… we see a step function increase in both e-commerce’s share of retail and Amazon’s share of e-commerce coming out of this crisis.
Goldman’s 12-month price target for Amazon is $2,600. The online retail giant closed Thursday at $2,042 suggesting a potential gain of 27%. Year-to-date AMZN is up about 9%.
Signs of Amazon’s growing importance at a time of shelter-at-home orders are already there.
Amazon has seen such extraordinary demand for essential household items such as groceries and toilet paper that it has had to limit non-essential items at its warehouses . This will allow it to concentrate on the much-needed consumer staples and medical supplies.
The e-commerce giant also recently announced that it was suspending Amazon Shipping, its third-party shipping program. This is another indication of the swelling demand. The program uses Amazon’s excess delivery capacity to ship non-Amazon packages. With the surge in demand, there’s no longer exists excess capacity.
The demand surge has also seen Amazon postpone Prime Day, its annual shopping event, by a month to at least August.
Besides its retail market share, Amazon’s cloud business is booming too. Some of the largest clients of Amazon Web Services include online video streaming giant Netflix (NASDAQ:NFLX) and teleconferencing app Zoom (NASDAQ:ZM). With the conference shutdowns, these services have seen unprecedented demand for entertainment and business, respectively.
Goldman Sachs is not alone in recommending Amazon as a crisis-proof stock. Over 40 analysts have placed a ‘Buy’ rating on the stock.
The average stock price target is $2,425 and the highest is $2,788, which means AMZN could appreciate by up to 37% if the latter prediction materializes.
It has not been all rosy for the online retailer during the pandemic, though. Its workers have been getting restive over their possible exposure to the novel coronavirus.
Last month, Amazon workers walked out from a New York warehouse demanding hazard pay and personal protection equipment . Earlier this month, the same was repeated at a Michigan facility .