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Amazon Loses Out on $10B Cloud Contract to Microsoft; Urges Judge to Overrule – Report

Amazon.com has taken to the courts once again in a bid to get a $10 billion Pentagon contract that was awarded to Microsoft invalidated, according to Reuters.

In a redacted court filing from October 23rd that was unsealed yesterday, Amazon (AMZN) reiterated its stance that the awarding of the contract to Microsoft (MSFT) must be overturned because it was granted in bad faith and that President Donald Trump used his influence to manipulate the contract.

Trump has publicly criticized the company and Amazon head, Jeff Bezos in the past. Amazon has called the decision flawed and politically corrupt.

Amazon was a front-runner to win the contract and filed its initial lawsuit in November 2019, after the contract was awarded to Miscrosoft. A judge granted Amazon’s request to temporarily halt the deal from moving forward in February.

The Defense Department stated in a court-ordered re-evaluation in September that Microsoft’s proposal represented the best value for the government. Amazon responded on Tuesday saying that its cloud computing solutions are the lowest priced by tens of millions of dollars.

Microsoft retorted by saying, “career procurement officials at the DoD (Department of Defense) decided that given the superior technical advantages and overall value, we continued to offer the best solution.”

Neither the White House nor the Pentagon has offered any comment thus far. (See AMZN stock analysis on TipRanks)

Cowen analyst John Blackledge reiterated his Buy rating 2 days ago and raised his price target from $4,150 to $4,350 (37% upside potential). He named the shares a “Best Idea for 2021.”

Consensus among analysts is a Strong Buy based on 36 Buys and 1 Hold. The average price target of $3,825.60 implies a potential upside of around 21% over the next 12 months.

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Daniel Plaks
Daniel Plaks has been involved in the financial markets for over 15 years. Originally from South Africa, he completed his post-graduate degree in Financial Management “cum-laude” and is currently working towards a CFA designation. Daniel’s passion for trading and investments has guided his career, and he has gained experience analyzing multiple asset classes across several jurisdictions.