Analyst: This FAANG Stock Could Surge 65%

Now may be the perfect time to buy premium on AMZN

Managing Editor
May 24, 2019 at 10:56 AM
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Online powerhouse, Inc. (NASDAQ:AMZN) is up 1.3% at $1,838.01, after Piper Jaffray said it expects the stock to reach $3,000 between mid-2021 and mid-2022. The target -- based on "conservative growth and valuation assumptions" -- implies 65% upside from the FAANG stock's closing price of $1,815.48 on Thursday. The brokerage firm has a "high degree of confidence" that AMZN can reach that level without significant changes to its business, and maintained an "overweight" rating and 12-month price target of $2,225.

Amazon stock recently pulled back amid U.S.-China trade tensions, just yesterday gapping below the formerly supportive 50-day moving average. Regardless, the FAANG giant has managed to hold on to long-term gains, as it currently sports a year-to-date lead of about 22%.

Today's bull note out of Piper Jaffray is par for the course, though, as all but one of the 27 analysts following Amazon stock sport a "buy" or "strong buy" recommendation. Further, the e-tailer's average 12-month price target stands at $2,228.53 -- a 21.3% premium to current levels.

Meanwhile, traders looking to speculate on Amazon stock's short-term trajectory should consider options. The stock sports a Schaeffer’s Volatility Index (SVI) of 28%, which ranks in the 28th percentile of its annual range. In other words, relatively low near-term volatility expectations are being priced into AMZN options, indicating that now could be a good time to buy premium.

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