Amazon’s (NASDAQ:AMZN) run in the last few years has often been marked by confusion. It made unexpected expansions into streaming media, space travel, web services, and seemingly everything but online retail. A new letter from CEO Andy Jassy, however, revealed just where the e-commerce giant is planning to go in the near future. Investors, for their part, aren’t objecting, sending Amazon shares up fractionally in Thursday afternoon’s trading.
Jassy’s latest missive to Amazon shareholders revealed two key points of future growth. One is a continued focus on cost-cutting, which we’ve already seen Amazon do with staff layoffs and the like over the last several weeks. The other is a focus on growth areas like artificial intelligence, which, again, we’ve seen take place over the last several weeks.
Jassy, penning his third letter to investors since taking over from Jeff Bezos, noted that there was “…considerable upside in each of the businesses in which we’re investing.” With e-commerce sales starting to slow amid soaring interest rates and consumers increasingly tapped out, the end result is that branching out will be vital to keeping Amazon up and running.
Putting Its Money Where Its Letter Is
In support of these initiatives, Jassy noted that Andrew Ng recently joined the board of directors at Amazon. Ng was part of efforts at both Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) and Baidu (NASDAQ:BIDU) to develop generative AI systems.
Further, Jassy came out with remarks about the recently-faltered iRobot (NASDAQ:IRBT) deal, noting that “…it’s kind of a sad story” how regulators moved to block an effort to expand over what they believed were potential issues of competition. Said regulators apparently believed that Amazon was so willing to throttle competition that, in this case, it would behave completely contrariwise to its own business model.
Is Amazon a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 41 Buys assigned in the past three months, as indicated by the graphic below. After a 91.91% rally in its share price over the past year, the average AMZN price target of $210 per share implies 11.79% upside potential.
