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Amazon on Track for Longest Monthly Winning Streak

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Amazon.com Inc.’s shares are set to achieve their sixth consecutive month of gains, marking their longest winning streak in over 12 years. According to Dow Jones Market Data, the last time Amazon’s stock (AMZN) gained for six months in a row was back in July 2011.

Amazon shares have experienced a notable increase this month, with a 2.6% rise in Thursday morning trading. Overall, they are up 3.6% for the month.

The positive trajectory began with an encouraging earnings report from the e-commerce and cloud-computing giant. The report revealed a stabilization of its Amazon Web Services (AWS) business.

Stabilizing AWS: A Significant Number for Amazon’s Earnings

According to Bernstein analysts led by Mark Moerdler, investor focus now shifts to the pace at which AWS growth can accelerate again. AWS workload migration is said to be ramping up, supported by healthy backlog growth, while optimization efforts are winding down. These factors lead to questions about the speed of AWS growth.

The Bernstein team also highlights that investors are increasingly paying attention to Amazon’s retail business. Not only has it displayed healthy revenue growth, but it has also delivered impressive domestic operating margins.

If Amazon can consistently expand its margins, the company could be on the verge of long-awaited inflections in operating income and free cash flow.

Amazon’s Collaboration with Shopify: A Win-Win Situation

Introduction

In recent weeks, several Wall Street analysts have shown their admiration for Amazon. Wedbush’s Scott Devitt named the stock a “best idea,” while Loop Research’s Rob Sanderson has projected a $200 price target. With shares currently trading above $138, Amazon’s momentum is strong.

Enhanced Collaboration with Shopify

Late on Wednesday, Amazon made an exciting announcement. The e-commerce giant is embarking on an enhanced collaboration with Shopify Inc. The collaboration will involve the launch of a new app called “Buy with Prime.” This app will allow Shopify merchants to offer their customers the option to leverage Prime benefits in terms of shipping and fulfillment.

Recognition of Shopify’s Competition Position

From Amazon’s perspective, this collaboration is a recognition of Shopify’s strong competition position among small- and medium-sized businesses (SMBs). While Amazon has been hesitant in the past to enter into revenue-sharing agreements, this compromise signifies the acknowledgment of Shopify’s platform integration capabilities. As a result, the Buy with Prime app becomes a more compelling option for merchants.

Boosting Amazon’s Penetration with Amazon Payments

Furthermore, this collaboration will assist Amazon in achieving one of its goals – further penetration with the Amazon Payments digital wallet. By integrating with Shopify’s platform, Amazon can expand its reach and provide a seamless payment experience for customers.

Conclusion

Amazon’s partnership with Shopify through the launch of the Buy with Prime app is an exciting development. It not only showcases Amazon’s recognition of Shopify’s competition position but also allows for increased integration and penetration in the e-commerce market. As both companies continue to thrive, this collaboration is set to bring mutual benefits.

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