Amazon has reached an agreement with the United Launch Alliance (ULA) to supply nine Atlas V launch vehicles. The launch vehicles should help support the tech giant's ambitions of offering affordable broadband services to customers and communities worldwide as part of Project Kuiper.
According to Amazon (AMZN), Atlas V is a reliable launch vehicle that provides suitable performance capacity and dependability levels. Launch vehicles from ULA boast a 100% success rate over more than 85 launches and have already been used in multiple NASA missions.
The Atlas V launch vehicles should help support Amazon’s Project Kuiper, that seeks to connect tens of millions of people. The initiative aims to offer a fast, affordable broadband network in areas where access is unreliable.
"We're determined to make affordable broadband a reality for customers and communities around the world," stated Amazon’s CEO and founder, Jeff Bezos. Adding further, he said, "ULA is a fantastic partner that's successfully launched dozens of missions for commercial and government customers, and we're grateful for their support of Kuiper."
Amazon has already committed $10 billion towards Project Kuiper, which already employs more than 500 people. The team is currently working on new technologies and innovations that can make broadband affordable and accessible.
After a 76% pop in 2020, Amazon shares are up 3% year to date. (See Amazon stock analysis on TipRanks).
Morgan Stanley’s analyst Brian Nowak reiterated a Buy rating on Amazon stock on a growing belief that the company will increase its investment in its workforce. Such investments should enhance Amazon's competitive edge against new players in the industry.
Nowak stated, “We are often asked about where AMZN is likely to focus and invest aggressively next. Over the past 5 years answers have included advertising, healthcare, last mile logistics, 1-day, international, B2B and others…but now we think the answer is increased worker compensation and safety/process investment.”
Nowak maintains a $4,200 price target on AMZN, implying 24.9% upside potential to current levels.
Consensus among analysts on Wall Street is a Strong Buy based on 32 Buy ratings. The average analyst price target of $4,106.60, implies 22.15% upside potential to current levels.
AMZN scores an 8 out of 10 on the TipRanks’ Smart Score rating system, signaling it is likely to outperform the overall market.
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