Amazon.com today
(As of 6:15 p.m. ET)
- 52 week range
- US$142.81
▼
$215.90
- P/E ratio
- 44.51
- Target price
- $236.20
Shares Amazon.com, Inc. NASDAQ:AMZN The company had an outstanding year, with shares rising 150% in 2023. While the company’s stock has slipped slightly in recent weeks, the tech titan hit new all-time highs earlier this month. Even with this pullback, sentiment around Amazon remains highly bullish, especially now that the price is hovering around the key $200 level.
Headquartered in Seattle, Washington, Amazon boasts a market capitalization of $2 trillion and continues to dominate e-commerce and cloud computing. Those of us on the sidelines should keep a close eye on this stock. As analysts increase targets and markets rise, Amazon’s days approaching the $200 mark could be numbered.
Amazon Fundamentals
First, let’s look at the company’s fundamentals. Amazon has been consistently beating Wall Street expectations for nearly two years, and its latest earnings report in late October is a prime example. The company beat expectations with its latest earnings report, reporting both EPS and revenue figures that significantly beat consensus.
Revenue grew an impressive 11% year-over-year, and operating profit grew a remarkable 56%. The strong performance underscores Amazon’s operating strength and positions the company well ahead of what is typically its strongest quarter of the year.
Moreover, the company continues to innovate and expand its scope of activities. Amazon Web Services (AWS) remains a key growth driver, with double-digit revenue growth and earnings expansion. Heading into the final few weeks of the year, these numbers signal Amazon is firing on all cylinders.
Bullish Analyst News Increases Optimism for Amazon Stock
Amazon.com MarketRank™ Stock Analysis
- Overall MarketRank™
- 99th percentile
- Analyst rating
- Moderate purchase
- Pros/Cons
- Growth potential 13.6%
- Short interest level
- Healthy
- Dividend Power
- N/A
- Environmental assessment
- -1.25
- Mood News
- 0.98
- Insider trading
- Sale of shares
- Project Profit Growth
- 17.39%
See full analysis
Many analysts are bullish on Amazon’s trajectory, and their overwhelming optimism is hard to ignore. The teams at Needham & Co., Loop Capital, Morgan Stanley and Wedbush are just a few of the more than a dozen that have reiterated their Buy ratings this month alone.
Loop Capital’s price target of $275 is one of the highest on the exchange, and from the stock’s closing price on Monday, November 25, it indicates a target upside of nearly 40%. Not bad for a $2 trillion giant. Analysts were quick to applaud Amazon’s recent results, with many highlighting rising profitability and strong cash flows as reasons to remain bullish.
Notably, no bull ratings over the past two months have had a price target below $200, highlighting widespread confidence that Amazon stock will continue to rise for the foreseeable future.
Potential Challenges for Amazon: Rising Costs and Competition
Bye Amazon’s outlook is generally positive, but it’s important to consider some potential risks. Increasing e-commerce competition and rising costs could put pressure on profits. for these reasons, Wells Fargo recently urged caution regarding the equal weight rating.
In addition, regulatory oversight remains an unresolved issue. Reports suggest that Amazon could face a European Union antitrust investigation next year, with possible penalties. But then again, these problems are almost par for the course for tech titans, and judging by recent price action, investors don’t seem too worried.
Participation
From a technical perspective, it’s important to note that Amazon’s uptrend remains largely unchanged despite the stock falling as much as 10% over the past two weeks. This was good as it eased some of the pressure on Amazon’s Relative Strength Index (RSI). It currently sits at 53, indicating plenty of room for the stock to start moving higher again before even approaching the overbought zone.
Investors should expect continued growth over the rest of the year, especially as broader market conditions work in Amazon’s favor. The S&P 500 is flirting with all-time highs, and the Fed’s recent interest rate cut is adding to risk appetite, which should continue to benefit stocks like Amazon. Let’s take a look at how stocks are trading heading into the Thanksgiving weekend; based on current sentiment, don’t be surprised if it never trades below $200 again.
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