Another record was set on Wall Street this week when Amazon (AMZN) became the second company in the world to breach the $1 trillion market capitalization mark. Sorting through old media clips, I came across a bold prediction made by Robert Luna, Surevest CEO and Chief Investment Strategist.
In May 2016, when Amazon was trading in the mid $600 per share, Robert predicted on CNBC that the price would reach $800 by year end. Fast forward to September of that year, Amazon surpassed the prediction.
What was Robert’s reaction? His analysis continued to indicate that the stock was underpriced so he raised the target to $1,000 by 2018. “It’s not a new story, but they’re still growing revenue by 30 percent. They’re growing active users by 20 percent,” he said. This time around he was off, but for the better. Since Robert made his first bold prediction, Amazon has returned just over 200%. Check out this archived video.
What does Robert think of Amazon at these levels? “We like the stock long term, but if you’re looking out for the next 6-12 months, I don’t know that now is the greatest entry point,” he said earlier this week on CNBC. Robert goes on to talk about other U.S. FAANG (technology) stocks, such as Netflix (Ticker NFLX) and Facebook (Ticker FB).
Economic Data Release
Strong economic data came in this week with the ISM Manufacturing PMI number at 61.3 vs. the average economist expectation of 57.6. That was the highest reading in 14 years. A number greater than 50 means the economy is expanding.
The much-anticipated job numbers were released this morning. The unemployment rate remained at 3.9 percent, the Bloomberg median estimate was for a tick-down to 3.8 percent. 201,000 new jobs were created, the Bloomberg consensus was 191,000 new hires.
– Luis Galdamez, Director of Research and Trading
Surevest Private Wealth