Amazon Faces Turbulence with Drone Delays and Canadian Exit Amid Bullish Market Ratings
1min read Over the past week, Amazon (AMZN) saw a slight dip of 0.24%. However, it has experienced a significant rise of 6.43% over the past week, and a 7.05% increase year-to-date, bringing its market capitalization to $2,469.45 billion. A notable adjustment was made by Raymond James, maintaining their strong buy rating on Amazon's stock while increasing their price target from $230.00 to $260.00.
Amazon has recently found itself under the spotlight following the suspension of its drone delivery service after two of its latest models crashed in wet weather conditions. These incidents occurred in Arizona and Texas, and the company has attributed the accidents to software issues caused by light rain during flight. The affected drone, the MK30, had previously been approved by the Federal Aviation Administration (FAA) and was actively used for deliveries in College Station, Texas, and Tolleson, Arizona. An Amazon spokesperson announced that the service will resume once software updates are complete and approved by the FAA, stressing that the decision to pause was not primarily caused by the incidents themselves.
In a strategic move, Amazon declared its decision to exit its operations in Quebec, Canada, which will result in the loss of approximately 1,700 jobs. This announcement has stirred dissatisfaction from the Canadian government, particularly from Francois-Philippe Champagne, the Minister of Innovation, Science and Industry. He expressed disappointment in discussions with Amazon Canada's leadership and publicly criticized the company’s approach as inconsistent with how business should be conducted in Canada.
Amidst these operational challenges, market analysts continue to show confidence in Amazon's stock performance. On January 24, Scotiabank rated Amazon as outperforming its sector with a price target of $306.00. Meanwhile, Cantor Fitzgerald and Needham assigned the stock with an overweight and buy rating, setting price targets at $270.00 and $250.00 respectively.
As Amazon navigates through these developments, it stands resilient in the market, affirming its influential presence reflected in its consistently strong stock performance and high market valuation.
