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Amazon: Strong Hardware Lineup; Great Breakout Play

Amazon (AMZN) is the e-commerce and web service provider we all know and love. Analysts, in particular, love the stock, with 32 unanimous Buy ratings, which is pretty unheard of for any widely-covered company.

It’s not a mystery as to why the Street is such a big fan of the name. Amazon stock has been stuck in a consolidation channel for well over a year, giving the company a chance to let its earnings catch up. The last time AMZN stock did nothing for an extended duration, shares eventually popped over 90% in a matter of months.

As the old technical analysis saying goes, “The bigger the base, the higher in space.”

With the base already a year and a half long, the stage certainly looks set for a potentially drastic upside move similar to the one enjoyed earlier last year. Given its more modest multiple and plenty of growth drivers that could support the next leg of the rally, I’m siding with the many analysts who are standing by their Buy ratings.

I remain bullish on the stock at around $3,400. (See Analysts’ Top Stocks on TipRanks) 

Amazon’s Fall Hardware Event Delivers Glimpse into Future with Astro

It’s not just Apple (AAPL) that’s been pulling back the curtain on unique new hardware innovations. Amazon’s fall 2021 hardware event revealed some exciting products, most notably its home robot Astro, which stole the show.

Astro is undoubtedly one of Amazon’s most ambitious hardware products to date and could be a real game-changer over the next several years. Indeed, Astro comes with a very steep $1,000 price tag, putting the innovative product out of the reach of many Amazon households.

However, Astro can only get better. It’s likely that the product will become more affordable over time, whether it be through discounts or “lite” versions of the robot, which may be available in the future.

Indeed, the “good, better, best” model seems to be working well for hardware offerings. Whether we’re talking about Apple’s hardware tiers (Base/Pro/Max) or Amazon’s Alexa-enabled Echo (Base/Dot/Studio), one has to think that Astro will eventually cater to a broader range of budgets, at some point down the road.

While Prime users may scoff at the thought of forking over $1,000 for a home robot, I do think it would be a mistake to discount the potential for Astro to work its way into the average home gradually, over the next decade.

Undoubtedly, Astro is an exciting frontier for Amazon, as it brings shopping and other services to wherever its customers go inside their own homes. Still, investors don’t seem enthused. The stock barely budged in response to Amazon’s most interesting hardware reveal to date.

While it may take many years for Astro to become a mainstay home product like the Echo, I do think that the product could provide Amazon with the means to push further into services, not to mention the boon it could give the already mature e-commerce business.

Imagine watching Prime Video on Astro’s screen, enjoying Prime Music from wherever you are in the home, or maybe, one day, playing a console-quality game on Astro via a game-streaming service such as Amazon’s Luna. Even if Astro isn’t yet ready for Primetime (forgive the pun), Amazon doesn’t stand to lose much.

Besides for Astro, Amazon introduced a wide range of new products, including the Echo Show 15, Amazon Glow, and Ring Always Home Cam, among other intriguing devices.

Wall Street’s Take

According to TipRanks’ consensus rating, AMZN stock comes in as a Strong Buy. Out of 32 analyst ratings, there are 32 unanimous Buy recommendations.

As for price targets, the average Amazon price target of $4,196.90 implies 21.36% upside potential. Analyst price targets range from a low of $3,775.00 per share to a high of $5,000.00 per share.

The Bottom Line on Amazon Stock

Amazon threw a lot at viewers of its fall hardware event, and it’s likely that more than just a handful will hit a spot with consumers, especially given each product’s relatively modest price point. While the line of products is unlikely to move the needle on the stock anytime soon, the products certainly give analysts even more to love about the stock.

Combined with solid fundamentals, a modest valuation and improving technicals, AMZN stock looks to be in a spot to prove analysts right in a big way.

Disclosure: Joey Frenette owned shares of Amazon and Apple at the time of publication.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of Tipranks or its affiliates, and should be considered for informational purposes only. Tipranks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. Tipranks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by Tipranks or its affiliates. Past performance is not indicative of future results, prices or performance.