Amazon.com, Inc. hasn’t generated the type of stock performance this year its investors have come to expect in the past decade. Bank of America analyst Justin Post says 2022 could be another big year for Amazon.
Amazon Dethrones Alphabet: Post named Amazon his top FANG stock pick for 2022 after 2021 top pick Alphabet, Inc. left Meta Platforms Inc., Netflix, Inc. and Amazon in the dust this year.
Alphabet shares are up 62.8 percent year-to-date, while Meta shares are up 19.5 percent, Netflix shares are up 9.6 percent and Amazon shares are up just 2.4 percent.
On Wednesday, Post said Bank of America card data suggests Amazon gained e-commerce market share in 2021, which position Amazon’s retail segment for a strong performance against easier comps in 2022.
“Further, AWS had a strong 2021, with three straight quarters of accelerating growth suggesting accelerating demand in the IaaS/PaaS market (and we think AWS should continue to benefit from higher labor costs that lead to demand for automation),” Post wrote in a note.
The Numbers: Year-over-year growth in e-commerce spending on Bank of America cards dropped from 62 percent in the first quarter of 2021 to 7 percent in the second quarter and just 1 percent in the third quarter. However, Post said e-commerce penetration has increased in the fourth quarter, and he’s projecting an acceleration of e-commerce sales growth in 2022 and beyond.
In addition, Post said Amazon’s big investments in fulfillment should start paying off in the second half of next year.
Bank of America has a Buy rating and $4,250 price target for Amazon.
Benzinga’s Take: Amazon may be the top FANG stock of 2022, but investors likely won’t go wrong betting on any of the FANG stocks in the long term. In the past three years, Amazon has been the worst overall performer of the group, and even Amazon’s stock has more than doubled in that time.
By Wayne Duggan
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