Amazon.com, Inc.: A Close Race for Second Headquarters “Lotto” Prize

GBH Insights' analyst Daniel Ives weighs in on Amazon's next big move: the expansion of its "consumer empire" with a second headquarters.


Amazon.com, Inc. (NASDAQ:AMZN) is clearing the decks to pick which city will house the e-commerce king’s second headquarters, and last week the first draft of 238 cities picked was scaled down to just 20.

GBH Insights analyst Daniel Ives weighs in calling this the ultimate “lotto ticket” for whichever city proves victor, besting the other original 237. Keep in mind, the analyst notes, a new headquarters also brings to the table the “prize” of $5 billion that it will take to get the second center of operations up and running. The investment will also lead to approximately 50,000 jobs as soon as the second headquarters gets “fully ramped.”

Calling this “a game of high stakes poker to see which city is ultimately awarded the new Amazon location,” Ives asserts: “We also believe that investors, city/state officials, technologists, and many throughout the consumer and enterprise landscape are watching this HQ situation closely as it could help read the tea leaves around Amazon’s next strategic move (e.g. original content build out, healthcare and pharmacy push) as it looks to further expand its consumer empire. We expect a decision to be made by the fall of 2018 on this major strategic move with a significant infrastructure and build out phase to take place between 2019-2020 for this next flagship HQ. With Amazon’s investments translating into tens of billions flowing into the Seattle economy over the last decade and given its clear momentum as a consumer and enterprise global behemoth, this will be a crucial decision for Amazon and ultimately change the future landscape and economic trajectory of the city that is awarded HQ2 for decades to come in our opinion.”

It’s a close race for those vying for the top 5 cities for Amazon’s second headquarters, and Ives concludes putting odds on Atlanta, followed by Raleigh, Washington (Ives’ “major wild card,”), Boston, and Austin (the sole city not from the East Coast in the analyst’s top five bets).

TipRanks underscores a strong bullish party on Wall Street rooting for this e-commerce king’s success. Out of 35 analysts polled in the last 3 months, a whopping 34 are bullish on Amazon with just 1 analyst left playing it safe on the sidelines. With a return potential of 5%, the stock’s consensus target price stands at $1,364.88.

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