Amazon's Project Kuiper satellite internet initiative typically gets less love on Wall Street compared to the tech giant's more earthbound investments in AI and robotics. But analysts with Baird offered a more bullish take on the effort Monday, envisioning Kuiper as a prelude to a larger "Amazon Space Platform."
Baird analyst Colin Sebastian reiterated an outperform call for Amazon stock in a note to clients, while raising his price target to 244, from 220. He said that Amazon's Kuiper spending remains under scrutiny, particularly with its launch timelines in question.
"But what is less discussed among investors is the potential for the Kuiper constellation over the long-term to serve as a 'launchpad' for a broader range of consumer and end-to-end 'space technology' services," Sebastian wrote. "What we envision is an offering that integrates space hardware, software, and infrastructure in ways that probably only a few large-scale enterprises, and some large countries, have the resources and capability to build."
Sebastian speculated on an "Amazon Space Platform" that could utilize the tech giant's investment in cloud infrastructure, Project Kuiper satellites, robotics and other technologies. That could include "smart satellites" that power space-related cloud services and even orbiting data centers that could be utilized by a range of startups and public agencies.
That market is "highly speculative," but it could have a total addressable market exceeding $1 trillion long-term, Sebastian wrote.
The price target hike from Baird focuses more on the near-term for Amazon's business. Sebastian cited positive e-commerce data and expectations for cloud growth to accelerate in the second half of 2025 for his revised Amazon price target.
Kuiper Deadline Approaches
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.
In a letter to shareholders last year, Chief Executive Andy Jassy described Kuiper as a "very large revenue opportunity." It will compete against the market-leading Starlink service from Elon Musk's SpaceX.
Amazon is required by the Federal Communications Commission to launch roughly half of its satellites by July 2026. Sebastian is forecasting that Amazon will have just over 700 satellites in orbit by next July. While that could prove a risk to the program, he said the FCC would likely extend the deadline since "launch delays were largely out of Amazon's control."
Last week, Amazon launched 24 new satellites, reaching a total of 78. In a surprising twist, Amazon partnered with Starlink parent company SpaceX to launch the Kuiper spacecraft.
Amazon Stock Up 4% This Year
Meanwhile, Amazon stock is up nearly 1% at 227.65 in recent action on the stock market today.
Amazon stock is up roughly 4% year-to-date, trailing a nearly 8% gain for the S&P 500.
But shares have been performing better in the past two months, bouncing back from a steep spring slump after the U.S. eased tariffs on Chinese goods.
Shares are trading just above a 5% buy zone from a cup-with-handle buy point at 214.84. Shares broke out above that level on June 9, according to IBD MarketSurge.
The tech giant will report second quarter earnings results on July 31.
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.
