Amazon Prime Time Numbers Exceed Loftiest Estimates (AMZN) shares climbed more than 1% Thursday after CEO Jeff Bezos disclosed Prime subscription numbers for the first time-and they dwarfed even the loftiest Street and analyst estimates.


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Prime has more than 100 million subscribers worldwide-far ahead of the Street's estimate of 80 million and the 92 million that GBH Insights analyst Daniel Ives came up with. Previously, Amazon vaguely referred to having "tens of millions of members." (It did not share revenue produced by Prime.)

The reveal highlights the growth of Amazon's subscription service, which it has pushed for more than a decade to retain customers and, in turn, fuel its core retail business with each purchase. Amazon is on pace to "own roughly half of U.S. commerce spending" by 2019, Ives said in a note on the company today.

The staggering growth of Prime underscores its value as a "golden jewel" for Amazon in cross-selling around its Whole Foods Market customers and creating a competitive moat around its Prime customer base to fend off rivals such as Walmart (WMT) and Target (TGT). Prime has more members than Costco Wholesale (COST), Bezos said in his letter to shareholders with his Prime news.

Shares for all three of Amazon's aforementioned rivals are down at least 1% this morning.

Last year, Amazon added more Prime members than ever before, shipping more than five billion items through the paid membership service worldwide, Bezos added.

The power of Prime members is pronounced: They spend roughly twice as much as nonmembers, Ives says. "Amazon continues to have an'iron grip' on the e-commerce market heading into the rest of 2018 despite a clear bullseye on its back from retailers around the world including [Walmart] as well as the Trump crosshairs in the background," writes Ives, who maintains a Highly Attractive rating and a $1,850 price target.

Amazon shares were trading at $1,555.08, up 1.77%, early Thursday.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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