As impressive as Amazon (NASDAQ:AMZN) has been lately, it seems a dose of reality has hit the pre-eminent online retailer of just about anything. The newest reports note that Amazon has stopped construction on parts of its latest headquarters in Virginia. Investors, meanwhile, are rewarding Amazon’s prudence in spending with a significant bump in share price.
Basically, Amazon looked at the market in its entirety and said that maybe it doesn’t need a big new headquarters building right now. That isn’t to say that work in Arlington has stopped altogether. Two new office towers are going up and will be occupied starting in June. However, there’s a development across the street that’s not going anywhere. At least, it’s not going anywhere this quarter.
Basically, the two towers Amazon has going up—Met Park—will have space to accommodate over 14,000 employees by themselves. Thus, Amazon saw little need to establish PenPlace, which was the second phase of the operation. It’s not canceled, at least not right now. However, it is on hold for the time being. Amazon noted that establishing PenPlace was part of “…a multi-year project…” anyway, so the delay isn’t so much a sign of significant economic trouble as it is a small delay.
Analysts are overwhelmingly on Amazon’s side. With 36 Buys and just two Holds, calling Amazon a Strong Buy is almost an understatement. Further, with an average price target of $137.05, Amazon stock comes with 44.6% upside potential.
