Amazon (AMZN) Stock Analysis: Investment Potential Following Q1 Earnings and Record High Close

  • Amazon.com (AMZN) has started strong in 2024, returning to record share value after a downbeat 2022 that put shares in recovery mode during 2023.
  • Following the company’s first-quarter earnings report in late April, Amazon stock analysts are bullish on the tech giant’s improving profitability and its ability to fend off challengers in the cloud-computing market.
  • With a market cap nearing $2 trillion, Amazon is among the world’s most valuable companies, but it is facing stepped-up competition for digital sales from brick-and-mortar titans Walmart (WMT) and Target (TGT), as well as upstarts such as Temu and Shein.

Amazon.com (AMZN) has started strong in 2024, returning to record share value after a downbeat 2022. Analysts are bullish on the tech giant’s improving profitability and its ability to fend off challengers in the cloud-computing market.

Amazon Stock Hits New High

Shares of Amazon reached an all time high close Thursday, May 9. That day, Amazon stock gained just under 1% to close at 189.50. The gains, with a slight pullback Friday, gave the company a market capitalization just below $2 trillion as of market open May 13. The $2 trillion threshold has been crossed only by Microsoft, Apple (AAPL), Nvidia (NVDA) and Alphabet (GOOGL).

How Did Amazon Perform In Q1 2024?

Amazon stock has gained in six of eight trading days since its first-quarter earnings report on April 30. For its quarter ending with March, Amazon reported a 216% year-over-year earnings increase, to 98 cents per share, and sales up 13% at $143.3 billion. Both metrics easily beat average estimates from analysts.

Amazon’s AI Push

On a call with analysts, Chief Executive Andy Jassy highlighted that AWS had reached a $100 billion annual revenue run rate. That includes a “multibillion-dollar” revenue run rate related to AI. “The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate,” Jassy told analysts.

Retail Business Boosting Profits

The profitability of Amazon’s retail business stood out to analysts following Amazon’s first-quarter earnings report. Overall, Amazon posted $15.3 billion in operating income for the first quarter, well ahead of the $11.3 billion operating profit analysts expected, according to FactSet.

Will Amazon Ever Offer A Dividend?

Meanwhile, there was some speculation heading into the report that Amazon could follow the lead of fellow Big Tech firms Meta Platforms (META) and Google by instituting a shareholder dividend. But there was no mention of a dividend in the company’s Q1 results announcement.

Amazon Stock: Wall Street Projections For 2024

Still, Wall Street analysts are broadly positive on Amazon stock. Of the 65 Amazon stock analysts following the company, 95% hold a buy rating, according to FactSet. Further, FactSet data shows those analysts have, on average, set a 12-month price target of 221.85 for Amazon stock, according to FactSet. That implies roughly 18% upside from Amazon’s mid-day trading price Friday.

Will Regulators Take A Bite Out Of Amazon Stock?

Meanwhile, Amazon is staring down what is likely the biggest legal fight in its 30-year history. Regulators are challenging Amazon’s market power and the company likely will grapple with intense scrutiny in the coming years.

Technical Analysis Of Amazon Stock

Amazon stock’s technical ratings are strong following the strong earnings report. The IBD Stock Checkup tool shows Amazon stock with a Relative Strength Rating of 89 out of a best-possible 99, indicating the stock has outperformed most of the market over the past 12 months.

Amazon Market Cap

You can check for Amazon’s current stock price here. Amazon’s market cap is $1.87 trillion, as of mid-day April 26. Here is how the stock has grown over time:

Time Period AMZN Stock % Gain S&P 500 % Gain
2024* 23 9.6
2023 81 24.2
2022 -49.6 -19
2021 2.4% 27
Since 1997 Amazon IPO* 207,677 530

*Prices as of market open May 13

Conclusion

Amazon.com (AMZN) has started strong in 2024, returning to record share value after a downbeat 2022 that put shares in recovery mode during 2023. With a market cap nearing $2 trillion, Amazon is among the world’s most valuable companies, but it is facing stepped-up competition for digital sales from brick-and-mortar titans Walmart (WMT) and Target (TGT), as well as upstarts such as Temu and Shein. Despite these challenges, Wall Street analysts are broadly positive on Amazon stock.

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Gideon Wolf
Gideon Wolfhttps://en.coinotag.com/
GideonWolff is a 27-year-old technical analyst and journalist with extensive experience in the cryptocurrency industry. With a focus on technical analysis and news reporting, GideonWolff provides valuable insights on market trends and potential opportunities for both investors and those interested in the world of cryptocurrency.
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