To The Moon

$Amazon.com(AMZN)$ is a must-have stock for investors following the company’s second-quarter earnings beat, according to R5 Capital research analyst Scott Mushkin. “Amazon, in our opinion, once again proved how unique its business model is and why investors need to own the equity,” Mushkin wrote in a research note. The company’s competitive advantage lies in its distribution and logistics network, which is “not replicable,” Mushkin wrote. Customers are becoming increasingly reliant on Amazon’s same-day or next-day delivery services, making a Prime membership a “must-have, not a want-to-have,” he added. This has made price hikes to membership fees go down fairly well among consumers, as evidenced by Amazon’s second-quarter results. “We’re happy with the results we’re seeing in the Prime program,” said Amazon Chief Financial Officer Brian Olsavsky in a call with investors. “Prime membership and retention is still strong. I think that change has been above our expectations positively.” Amazon workers sort packages for delivery in New York Revenue roseby 7% to $121.2 billion in the quarter, above Wall Street consensus estimates and the company’s guidance range. Advertising revenue of $8.7 billion held steady in the quarter, even as fears about how a recession could impact ad budgets has rocked other tech giants. Mushkin believes Amazon’s advertising services are another advantage over competitors, given his proprietary research on the effectiveness fo advertising on the platform. Barron’s highlighted Amazon’s advertising revenue growth earlier this year when making the case that it was atop pickfor 2022.Barron’salso argued Amazon’s Web Services Cloud business could be a main growth driver in coming years. That said, the company will still feel pressure from rising macroeconomic headwinds, Mushkin wrote, leading the analyst to lower his profitability and margin outlook for the rest of the year. He still maintained a Buy rating and a $173 price target. Of the 53 analysts covering the stock, 94% rate it a Buy, while 4% rate it a Hold and 2% a Sell, according to FactSet.