Amazon launched another batch of satellites for its Project Kuiper internet service initiative Monday, reaching more than 100 satellites total. Amazon stock was slightly lower.
The launch from Cape Canaveral, Fla. marked Amazon's fourth for Project Kuiper, bringing 24 satellites into low Earth orbit. The launch marks the second time that Amazon has teamed up with SpaceX, the Elon Musk-led startup that Amazon hopes to compete against. SpaceX owns Starlink, the market leader for satellite-powered broadband internet.
Announced nearly six years ago, Amazon's Project Kuiper hopes to launch more than 3,000 satellites to offer internet connectivity to 400 million to 500 million households, as well as some governments and enterprises.
The company has not launched a commercial offering yet. Amazon announced an agreement with the Australian state-owned National Broadband Network last week to provide internet to more than 300,000 customers across the country by mid-2026.
Amazon said in a blog post that it has secured more than 80 launches to build out its array. The company is required by the Federal Communications Commission to launch roughly half of its satellites by July 2026. Monday's launch came after several delays for weather issues.
On the stock market today, Amazon stock is down a fraction at 221.82 in recent action.
What Is Amazon's Project Kuiper?
In a letter to shareholders last year, Amazon Chief Executive Andy Jassy described Project Kuiper as a "very large revenue opportunity." It will compete against Starlink's service for residential and enterprise customers, as well as government contracts.
Jassy was similarly optimistic during a call with Amazon stock analysts late last month. He said Kuiper will have performance advantages and "compelling" pricing.
"I think that we will have a pretty meaningful differentiation here in performance," Jassy told analysts following Amazon's Q2 earnings report.
At the current pace of satellite launches, however, analysts have questioned Amazon's ability to reach the total required by the FCC.
"We're working very hard to get the satellites into space," Jassy said following the Q2 report. "We have some delays with some of the rocket providers, but we have most of the available rocket launches over the next couple years and were very helpful to get the service into commercial beta later this year or early next year."
Amazon Stock Analysts Debate Kuiper
Amazon stock slid 8% following the company's Q2 results last month and is trading roughly flat this year. Shares took a hit largely because growth for the Amazon Web Services cloud business disappointed compared with Microsoft and Alphabet.
But Amazon's Project Kuiper investments have also been debated among stock analysts over the past year. The company has committed to spend at least $10 billion on the effort. There are concerns that will weigh on margins for the North American retail operations at Amazon, given the lack of immediate revenue.
"What investors are most worried about are weak AWS margins, investments in Kuiper and Alexa, tepid earnings guidance, and higher capital expenditures," Needham analyst Laura Martin wrote to clients following Amazon's Q2 report. She reiterated a buy call for Amazon stock.
Still, some analysts are bullish on the revenue potential for Project Kuiper and its ability to power further space-based services from Amazon.
"Assuming Amazon has just a 30% consumer share (Starlink already has 6 million subs), we see a $7.1 billion 2032 revenue potential for Amazon," BofA Securities analyst Justin Post wrote to clients last month. "We also expect Kuiper to have synergies with Amazon's logistic network, and the project to generate additional revenues from AWS's enterprise and government customers."
The IBD Stock Checkup tool, meanwhile, shows Amazon stock holds an IBD Composite Rating of 94 out of a best-possible 99. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
