Amazon shares soared to an all-time high on Wednesday, and there's every reason to believe the climb will continue as the e-commerce giant becomes the largest delivery company in the U.S. Bank of America projected Wednesday that Amazon will deliver more than 9 million packages worldwide this year. Leveraging its logistics network buildout and regionalization, analysts said delivery speeds have “improved dramatically, with roughly 25% of estimated packages now being delivered the same or next day.” Bank of America estimates that Amazon will deliver 5.9 million packages in the U.S. in 2023, more than United Parcel Service and FedEx. Despite “significant improvements” last year, analysts said the efficiency of Amazon's logistics operations remains below 2018 levels on many metrics. This gap is part of why they argue that “there is still room for efficiency gains” and that “retail margin leverage will rise in 2024.”For these reasons, Bank of America raised its price target on Amazon to $220 from $210 and maintained its buy rating. BofA noted the importance of Amazon's retail margins, which it believes are outperforming its cloud business, Amazon Web Services (AWS). Over the past 18 months, Street expectations for 2025 retail profit growth have increased 219%, while AWS profit expectations have fallen 2%. Analysts expect retail to drive 50% of Amazon's generally accepted accounting principles (GAAP) operating profits in 2027, up from 33% in 2023. Amazon shares surged more than 4% on Wednesday, bringing their year-to-date gains to more than 27%. The stock has surpassed $2 trillion in market cap during trading hours. In April, we raised our price target on Club to $200 after Amazon released a strong first quarter and guidance that was seen as conservative. AMZN YTD Amazon's management focus on further reducing the total cost of serving e-commerce customers and increasing logistics efficiency should be a concern for competitors. Jassy said customers are turning to Amazon for more purchases in categories like everyday essentials, increasing total spend and frequency of purchases. “They're lowering packaging costs, which means they can do more same-day delivery, which means CVS has to be on the lookout.” [and ] “Walgreens,” Jim said on Wednesday. Logistical efficiencies have allowed Amazon to carry a large volume of products from different brands and categories that appeal to Prime members. In addition to same-day delivery, Jim rhetorically asked, “Why go to the store on your way home when you can get it delivered to your home?” He added, “It's cheaper and delivered to your doorstep the same day. That was Amazon's ultimate goal. They're doing it well.” It's no surprise that “faster delivery speeds lead to more frequent purchases,” according to Evercore ISI's annual retail survey. 51% of respondents said they would choose Amazon's same-day delivery option, a survey record. Among Prime members, the figure was even higher at 58%. Based on these results, Evercore believes Prime's same-day delivery is a “multiplier for purchase frequency and overall spending.” Amazon's retail power will be on display on July 16 and 17, when the company holds its latest Prime Day event. Last year, two-day online sales in the U.S. grew more than 6.5% to a record $12.7 billion, according to Adobe Analytics. Amazon said it sold 375 million items during the two-day discount event, up from 300 million in 2022. The latest Wall Street analysis and Jim's thoughts support the idea that Amazon's stock has room to rise further. But for club members who have little or no shares, we were curious to see where there might be a good entry point for a stock trading at an all-time high, so we pointed out some buy levels for Amazon and other big tech companies that have soared this year. (Jim Cramer's Charitable Trust is long AMZN. See the full list of stocks here.) Subscribers to Jim Cramer's CNBC Investment Club receive trade alerts before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling shares in the Charitable Trust's portfolio. If Jim talks about a stock on CNBC television, Jim waits 72 hours after issuing a trade alert before executing the trade. The Investment Club information above is subject to our Terms of Use and Privacy Policy, as well as Disclaimer. Receipt of any information provided in connection with the Investment Club does not create any fiduciary duty or liability, and no particular results or benefits can be guaranteed.
An Amazon employee pulls a cart loaded with delivery packages on E 14th Street in New York City on July 12, 2022.
Michael M. Santiago | Getty Images
Amazon The company's shares soared to an all-time high on Wednesday, and there's every reason to believe the rally will continue as the e-commerce giant becomes the largest delivery company in the United States.
