Amazon's Acquisition of Globalstar Boosts Stock Price Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy AMZN?
Source: stocktwits
- Acquisition of Globalstar: Amazon's acquisition of Globalstar for $90 per share, representing a 23% premium over its Monday closing price, will provide access to a satellite network and infrastructure, with plans to launch direct-to-device services by 2028, significantly enhancing its competitive edge in the low Earth orbit market.
- Stock Price Upside: Citron Research suggests Amazon's stock could reach $300 based on historical valuation multiples applied to forward earnings, as the current trading multiple of around 30 times earnings is well below the five-year average of 48 times and the ten-year average of over 60 times, indicating market underestimation of its long-term potential.
- Diverse Market Presence: Despite Amazon's presence in satellites, AI chips, and data centers, Citron believes the market still underestimates its “world domination,” highlighting its rapidly growing ad business that generates nearly double TikTok's revenue and is expanding faster than Meta's.
- Investor Sentiment Optimistic: Retail sentiment on Stocktwits remains 'extremely bullish' with high message volumes, as users view Amazon's acquisition of Globalstar as a “long-term positioning,” reflecting strong market confidence in Amazon's future growth prospects.
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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: 248.500
Low
175.00
Averages
280.01
High
325.00
Current: 248.500
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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- Impact of Investment Cycle: While Amazon is undergoing a significant capital expenditure cycle that may lead to increased depreciation in 2026, management believes that if these expenditures yield favorable returns, future earnings could improve significantly, particularly with investments in AI.
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- Advertising Segment Growth: Amazon's advertising revenue has surpassed $60 billion annually and continues to grow at double-digit rates, leveraging user intent for more effective ads compared to other digital formats, thereby expanding its footprint in the digital advertising market.
- Retail Market Position: While retail growth is slowing, Amazon remains the largest e-commerce platform in the U.S. with $426 billion in sales in 2022 and over 200 million Prime members globally, continuously feeding data into its other business segments and enhancing competitive strength.
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- Amazon's Dual Growth: As the largest cloud service provider, Amazon's custom chip business is rapidly growing, projected to reach a $20 billion run-rate, and its Trainium chips are expected to significantly reduce capital expenditures while boosting operating margins, positioning it strongly for future market potential with dual growth drivers in cloud computing and e-commerce.
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- Investment Scale and Returns: Last year, Apollo originated $310 billion in new investments, with 80% being investment-grade financing, serving major clients like Intel, BP, and Shell, indicating a robust investment strategy in a high-risk market.
- Role of Tech Companies in Debt Market: Rowan noted that the influence of technology companies in the debt market will continue to grow, predicting that in the next five years, major issuers of investment-grade debt will be dominated by large tech firms and banks, reflecting significant structural changes in the market.
See More
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- Economic Data Impact: While specific data was not provided, heightened attention to upcoming economic indicators and corporate earnings reports may further influence index movements.
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