Here’s Why Amazon is Going to $1000

old bullWe’ve seen a lot of bullish Amazon.com, Inc. (NASDAQ:AMZN) calls over the past several weeks, but this new one takes the cake.

Today, MKM Partners published a research note championing Amazon as a pick to reach nearly $1,000 per share — ok, $995 to be exact. But that would still be a 31% gain from current levels, for a stock that’s already up 42% over the past year.

The firm lifted its target from $850 to $995, citing AMZN’s strong Q2 results. MKM loves the fact that revenues came in at the high end of guidance, and the company posted surprisingly strong margins. Although the company’s beat estimates for international sales growth and AWS margins, the analyst feels those were easy beats. However, MKM sees domestic margin performance as a big upside surprise that could drive further EPS gains sooner rather than later.

Amazon shares fell $8.03 (-1.05%) to $759.71 in Tuesday afternoon trading. AMZN has risen 12.5% year-to-date, nearly doubling the return of the S&P 500.

AMZN-2016-08-02

A contrarian investor would look at this call as an opportunity to short Amazon, but with so much momentum behind the name, that would be treading on some very dangerous ground indeed. Not only is the price action bullish, but the company is building moats around multiple business units, including retail, AWS, streaming, and more.

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