Amazon.com Inc. (NASDAQ: AMZN) is making the case for the connected home with its most recent offering of Alexa-related products. While it is great to be able to talk to any and all kitchen appliances, the question remains, does the home really need to be this connected? One analyst seems to think so.
Argus reiterated a Buy rating for Amazon with a $2,250 price target, implying upside of 17.5% from the most recent closing price of $1,915.01.
The firm believes that the connected home appears to be yet another market that Amazon has conquered with stunning speed. Originally linked to Echo and Dot, Alexa is now accessible “everywhere – in your kitchen, in your living room, in your office, and now in your car or truck,” according to Tom Tuck, Amazon’s Senior Vice President of Alexa.
Argus believes that the stars are aligning for Amazon to have another bang-up holiday season. Industry pundits believe that 2018 holiday spending could grow about 5% to 6% annually, potentially exceeding $1.1 billion. U.S. online sales continue to grow at a double-digit pace. Amazon is growing faster than the online retail industry, as more and more third-party merchants are drawn to the Amazon site.
Last week, Amazon announced a range of new devices and applications for the connected home and beyond. The products included upgrades to existing digital assistants such as Echo, Dot and Echo Show; a new Echo Auto device, and a device for recording shows from over-the-air TV; so-called companion devices including a wall clock and various audio enhancers; and smart home devices including microwave and a smart hub called Plug.
The common element in all these devices is Alexa, the software-based, mellifluous voiced assistant. Initially confined to Echo and its smaller sibling Dot, the increasingly cognizant Alexa now resides in thousands of applications and devices, many designed to automate everyday products and tasks. Along with the new devices, Amazon announced upgrades to Alexa and promised many more to come.
Shares of Amazon were last seen at $1,901.13, with a consensus analyst price target of $2,122.60 and a 52-week trading range of $934.75 to $2,050.50.