Amazon’s (AMZN) bid to overturn the awarding of the Joint Enterprise Defense Initiative’s (JEDI) contract to Microsoft (MSFT) has received a significant boost, according to the Washington Business Journal (WBJ). The Court of Federal Claims has denied motions by the Department of Justice and Microsoft to dismiss the contract protest lodged by Amazon Web Services (AWS).
WBJ reports that the long-running dispute over the lucrative cloud contract is far from over. A ruling by Judge Patricia Campbell-Smith means the Amazon cloud unit still has a chance to push for the deposing of the $10 billion contract with Microsoft.
AWS has always insisted that the awarding of the JEDI was not done properly. The cloud unit has cited political interference by the then-president Donald Trump, given his long held anti-Amazon sentiments.
According to the WBJ, AWS was originally the leading contender for the multi-billion contracts before Trump’s interference. (See Amazon stock analysis on TipRanks)
An AWS spokesperson stated, “The record of improper influence by former President Trump is disturbing, and we are pleased the court will review the remarkable impact it had on the JEDI contract award.”
The WBJ report states that in response to the court ruling, Microsoft’s corporate vice president of communication Frank Shaw reiterated that it “changes little.” He says the software giant remains ready to perform work on the contract once the current standoff is resolved.
BMO Capital analyst Daniel Salmon maintains a Buy rating on AMZN with a price target of $4,200. This implies around 21% upside potential from current levels.
Salmon stated, “We think AMZN’s difficult comps owing to the acceleration of eCommerce during the pandemic are well understood, but nevertheless will remain the top focus for the print. With that said, we are more intrigued by the potential change in margin profile as some COVID related expenses could fade as vaccinations rise and restrictions ease.”
Wall Street is bullish on AMZN. Consensus among analysts is a Strong Buy based on 33 unanimous Buy ratings. The average analyst price target of $4,118.69 implies 18.7% upside potential over the next 12 months.
Amazon scores a robust 9 out of 10 on TipRanks’ Smart Score rating system, implying it could outperform market averages.