Maintaining a $210 price target, Bank of America reiterated its “Buy” recommendation on Amazon.com (AMZN, Financials), despite the difficulties afflicting Amazon’s Project Kuiper satellite broadband venture. Although Amazon’s satellite project has long-term promise, Bank of America claims that for many years there are projected to be little financial rewards.
With 2.6 billion individuals worldwide without internet connectivity, BofA analysts noted that this presents a potential income stream of about $26 billion by 2032. Amazon has challenges, meanwhile, from discretionary money restrictions for the disconnected populace as well as competition from Starlink and the significant expenditures needed.
Through consistent, worldwide connection, the bank also observed that Kuiper might ultimately help Amazon’s logistics networkwhich comprises autonomous cars, trucks, drones, and delivery robotsthrough its military communication solutions collaboration with the U.S. Department of Defense, Amazon Web Services might further use Kuiper for corporate and government applications.
Notwithstanding these possible synergies, BofA underlined that Kuiper’s losses are projected to rise and that any market capitalization boost connected to the satellite project would not show for years. However, the analysts believe Amazon holds the potential to navigate any near-term issues and overcome them.
This article first appeared on GuruFocus.
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