Amazon's Acquisition of Globalstar Accelerates Space Economy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 8 hours ago
0mins
Should l Buy AMZN?
Source: Fool
- Amazon's Investment Plans: Amazon initially planned to invest $10 billion in 2020 for its low Earth orbit satellite constellation but has now decided to more than double its budget, reflecting its ambition in the space economy.
- Acquisition of Globalstar: Amazon's acquisition of Globalstar for approximately $11.6 billion, which operates 24 satellites and holds key radio spectrum licenses, is expected to accelerate the progress of the Amazon Leo project.
- Satellite Deployment Progress: Despite aiming to deploy over 3,000 satellites, Amazon has only managed to deploy 241 so far, facing a July 30, 2026 FCC requirement, necessitating an expansion of its launch capacity.
- Investment Risks and Opportunities: With capital expenditures projected at $200 billion, Amazon may face negative free cash flow in 2026; however, management remains confident in returns from cloud computing and e-commerce investments, while the risks associated with the Leo project warrant attention.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 249.700
Low
175.00
Averages
280.01
High
325.00
Current: 249.700
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Significant Revenue Growth: AWS achieved a 24% revenue growth in Q4, marking its best performance in over three years, indicating strong market demand and the likelihood of continued profit increases for Amazon.
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See More
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- Capital Expenditure Plans: The company aims to scale its data center capacity from 170 megawatts to between 800 megawatts and 1 gigawatt by 2026, with projected revenues of $3 billion to $3.4 billion and an EBITDA margin near 40%, which could significantly enhance market expectations for its valuation.
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