Market News

Amazon AWS Acquires Encrypted Messaging Service Wickr

Amazon’s (AMZN) cloud unit Amazon Web Services (AWS) is strengthening its messaging capabilities. The unit has confirmed the acquisition of Wickr, a company that develops secure end-to-end encrypted communication technology.

With the acquisition, AWS users will gain access to advanced security features not in use in traditional messaging and communication services. The technology should be of great use to security-conscious businesses and government agencies, given the encryption in use.

Currently, the public sector uses Wickr offerings to securely communicate with office-based employees and provide a tactical edge on encrypted communications. (See Amazon stock chart on TipRanks)

“Enterprise customers use Wickr to keep communications between employees and business partners private, while remaining compliant with regulatory requirements,” AWS in a press release.

Wickr’s addition to the Amazon cloud offering could not have come at a better time. Currently, there is demand for secure communication solutions given the acceleration to hybrid work environments. Enterprise and government agencies are increasingly turning to offerings that can protect their communications across many remote locations.

Recently Jefferies analyst Brent Thill has reiterated a Buy rating on Amazon with a $4,200 price target implying 23.48% upside potential to current levels. According to the analyst, increased logistics investments adequately position the e-commerce giant for expanded same-day delivery services.

Last year, Amazon increased its global logistics network by 50% to 2.1 million square feet. The company plans to expand its U.S. capacity by 90 million square feet and international capacity by 25 million square feet.

Thill stated, “We believe AMZN’s expanded capabilities position them to announce expanded same-day delivery offerings, supported by a recent focus on building a network of ~550 delivery stations by year-end, which generally focus on expedited delivery.”

Consensus among analysts is a Strong Buy based on 33 unanimous Buys. The average Amazon analyst price target of $4,281.25 implies 25.87% upside potential to current levels.

AMZN scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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