Top E-Commerce Stock Selection by BMO Capital Markets
BMO Capital Markets has discerned its premier selection within the E-Commerce & Marketplaces domain, spotlighting a firm that, while presenting a medley of third-quarter results, has exhibited notable dynamism in its cloud computing and artificial intelligence segments.
Still pondering which stocks will surpass market expectations? Our AI-driven portfolio, refreshed monthly, is outperforming the S&P 500 by an impressive 118%. Explore this month’s selections »
The investment institution retains an Outperform rating for its top selection and has elevated the price target, crediting the company’s burgeoning growth in high-margin arenas, despite encountering transient challenges in its retail and advertising sectors.
Amazon (AMZN)
Unsure about your pre-earnings purchases? Our AI’s recent predictions have yielded returns ranging from +77% to +118% following earnings announcements. Check out this month’s earnings recommendations »
BMO Capital Markets reaffirmed its Outperform rating, raising the target price to $390 from $380, thereby designating the e-commerce titan as its “Top Pick.”
The company released a mixed bag of third-quarter results for 2026, with net sales aligning with forecasts while operating income surpassed expectations by 7%.
Notably, AWS revenue soared to $46 billion, reflecting a 39% year-over-year increase, the most rapid growth witnessed in 19 quarters and exceeding market estimates by a single percentage point.
The cloud segment’s annual recurring revenue climbed to $184 billion, buoyed by a robust backlog estimated at $578 billion, exhibiting triple-digit growth.
Management anticipates AWS growth to exceed 40% in 2027 and 2028, with a projected trajectory to achieve $1 trillion in revenue within 5 to 10 years.
Revenue derived from AI initiatives exhibited a year-over-year growth rate in the triple digits, with Bedrock token volumes escalating nearly 17-fold.
Conversely, advertising revenue experienced a significant deceleration to 12% year-over-year, disregarding foreign exchange impacts, which fell 6 percentage points short of consensus estimations, a consequence of a Prime Day calendar adjustment.
Retail operations exhibited a similar slowdown, with Online Stores and Physical Stores each rising by 2% year-over-year, and third-party Seller Services growing by 10%.
The company accomplished a record consolidated operating margin of 13.9%. Capital expenditures reached $76 billion in the third quarter, primarily directed toward AWS and AI infrastructure, with total expenditure for 2026 anticipated to hover around $220 billion.
BMO has adjusted its 2026/2027 net sales projections to $831 billion and $974 billion, respectively, while also revising 2027/2028 capital expenditure anticipations to $320 billion and $335 billion.
Source link: Finance.yahoo.com.
