Amazon (AMZN) shares reached a record intraday high after reporting first-quarter results and guidance that blew past expectations.
Shares of the e-commerce giant jumped as much as 2.4% to reach as high as 3,553.39 Friday morning in New York. The stock lost steam in afternoon trading, however, and ultimately ended lower by 0.1% to 3,467.42, or short of a record closing high.
The surge came after the company posted yet another quarter of ballooning sales and earnings, easily exceeding expectations as a pandemic-driven pick-up in online shopping and cloud demand showed no signs of slowing down.
"Amazon undoubtedly has a ton of momentum coming out of the pandemic. I think that one thing that we have heard from investors is they are worried about their ability to comp the comp," Anthony Chukumba, Loop Capital managing director, told Yahoo Finance on Friday. "We're not concerned about that."
"One thing to consider is they now have over 200 million Prime members. That's up over a third from the last time they gave us a number, which was in January of 2020," he added." In addition to that, Prime members are ordering more often, and they're ordering a wider variety of products. And so, we think that they picked up a ton of new customers during the pandemic, and the vast majority of those customers are going to remain Amazon customers. And so they have a ton of momentum, and obviously it'll slow down a bit because you're going to start the 'anniversarism' of really difficult comparisons. But it's not going to slow down as much as some investors fear."
Amazon's first-quarter net sales jumped 44% to $108.52 billion, marking a second straight quarter with revenue of more than $100 billion. The beat was driven by each of Amazon's e-commerce, cloud computing and advertising segments, with online store net sales of $52.9 billion and Amazon Web Services net revenue of $13.5 billion each topping estimates. Earnings per share of $15.79 were easily above the $9.69 expected.
The Seattle-based company also signaled this strength was set to continue into the current quarter. Amazon projected net sales of between $110 billion and $116 billion for a jump of as much as 30% year-over-year, with its shopping holiday Prime Day moved back to the second quarter this year. Operating income will likely come in between $5 billion and $8 billion, even including an estimated negative impact of another $1.5 billion due to virus-related costs.
The stronger-than-expected results and guidance also catalyzed a number of price target increases across Wall Street firms. Among these were JPMorgan Chase analyst Doug Anmuth and Cowen analyst John Blackledge, who each raised their price targets on the stock to $4,600 from $4,400. Raymond James analyst Aaron Kessler raised his price target to $4,125 from $4,000.
"Amazon delivered strong 1Q results driven by upside in core retail (with International acceleration), as well as accelerating growth in higher margin segments including AWS and advertising," Kessler wrote in a note Thursday evening. He maintained an Outperform rating and increased his price target "given 1) continued momentum in eCommerce sales; 2) Continued leadership and momentum in cloud; 3) robust advertising growth; and 4) an improving margin profile driven by retail scale efficiencies, AWS, and advertising."
Shares of Amazon have risen 6.6% for the year-to-date through Thursday's close, underperforming against the S&P 500s 12% gain over that time period.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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