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How high can Amazon stock go? 4 reasons it keeps rising during COVID

Like the weather outside your window right now, Amazon is hot. The Seattle-based e-tail giant’s stock price keeps hitting all-time highs.

How high can Amazon stock go? 4 reasons it keeps rising during COVID
[Photo: Morning Brew/Unsplash]
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Like the weather outside your window right now, Amazon is hot.

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The Seattle-based e-tail giant’s stock price keeps hitting all-time highs, as still-homebound shoppers and likely equally self-quarantined investors continue to embrace the company that’s been supplying people from Boise to the Hamptons with food, hand sanitizer, wading pools, baking pans, and outdoor lights.

On Monday, Amazon stock broke the $3,000-per-share mark for the first time ever and closed at $3,057.04, up $166.74  or 5.77%. It was $3,054.03 in midmorning trading.

The stock is expected to continue to soar. Here are four things you need to know:

  • Amazon has COVID-19 to thank, in part. During the height of the pandemic, stores selling nonessentials were closed and many people refrained from going to those that were open even to purchase necessary items, like food and toiletries. Consumers turned to the internet—individual retailers’ websites, grocery delivery services, and, of course, Amazon. The growth comes from two categories of people: those buying items online for the first time and existing online shoppers buying more this way. Over 204 million people ages 14 and older are expected to make an online purchase this year, according to eMarketer.
  • Don’t forget about Prime. Amazon’s first-quarter earnings report—which covered the three months ending March 31, right at the start of the pandemic—shows that subscription sales were over $5.5 billion, up from $5.2 billion-plus in the fourth quarter of 2019. The impact of COVID-19 on Prime memberships remains unknown until July 23, when Amazon’s Q2 earnings are released.
  • Closing in on history. Amazon could be on its way to becoming the first $2 trillion U.S. company; it’s current market cap is $1.525 trillion. Others in the running for that title are Apple and Microsoft, with market caps of $162 trillion and $1.598 trillion, respectively. The first $2 trillion company ever was Saudi Aramco, which hit that mark in December.
  • It’s not all shopping. Amazon Web Services, the company’s cloud-computing arm, is an important component. And that unit was in the news as recently as last week, when it announced the launch of its new Aerospace and Satellite Solutions segment.

Of course, not everyone loves Amazon. The e-tail titan continues to face criticism about the poor treatment of its fulfillment center workers, condemnations that have grown worse during the pandemic due to concerns about safety precautions to prevent employees from contracting COVID-19.