The Amazon (NASDAQ: AMZN) stock price surged to an all-time high after the Pentagon cancelled the Joint Enterprise Defense Infrastructure (JEDI) project. The stock ended the day at $3,675 and is up by more than 0.80% in premarket trading. The jump values the company at more than $1.85 trillion.
Amazon and JEDI contract
The Amazon stock price rose on Tuesday after the Pentagon decided to abandon the $10 billion JEDI contract that was awarded to Microsoft in 2019.
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Instead, the department said that it will launch a separate project that will likely go to the two companies. The project will be known as the Joint Warfighter Cloud Capability (JWCC). Other companies that could be considered are Oracle, Alphabet, and IBM).
Therefore, the stock rose because investors believe that the company will make billions in the new cloud computing project. In a statement, the Pentagon said:
“With the shifting technology environment, it has become clear that the JEDI cloud contract, which has been long delayed, no longer meets the requirements to fill the D.O.D.’s capability gaps.”
The Pentagon was referring to the ongoing litigation in an American court. The case was brought by Amazon, which accused the agency for favouring Microsoft because of Donald Trump’s animosity towards Jeff Bezos. Bezos owns the Washington Post, a paper that was critical of the president. In a statement, Amazon said:
“We look forward to continuing to support the D.O.D.’s modernization efforts and building solutions that help accomplish their critical missions.”
Is AMZN stock a buy?
The Amazon stock price also rose after the company got a new leader. Andy Jassy became the company’s CEO after Jeff Bezos resigned. Investors seem to believe that Jassy will carry on with Bezos legacy.
Under Bezos, the company transformed itself from a small bookseller to the fourth-biggest company in the world after Apple, Microsoft, and Saudi Aramco. It also expanded its services to include streaming, cloud computing, and gaming, among other services. It also acquired several companies like Whole Foods, Twitch, and MGM.
Analysts are generally positive about Amazon. For example, those at UBS, JP Morgan, Jefferies, and Bank of America have a buy rating on the firm. JP Morgan is the most optimistic about the AMZN stock price since they have a target of $4,600.
The company has several benefits, including a clean balance sheet, a healthy market share, and strong growth in many sectors. For example, its AWS service continues to experience double-digit growth as more companies shift to the cloud.
Amazon stock price forecast
The daily chart shows that the Amazon stock price made a bullish breakout on Tuesday. It managed to move above the important resistance at $3,546, which was the previous all-time high. It remains above the 50-day and 100-day moving average while the MACD and momentum indicator has continued rising. Therefore, the stock will likely keep rising as bulls target the next key resistance at $4,000.
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