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Amazon.com, Inc. (AMZN), with a strong market cap of $1.9 trillion, operates in the e-commerce, cloud computing, and artificial intelligence sectors. Based in Seattle, Washington, it engages in retail, subscriptions, AWS, and electronic device manufacturing.
Shares of Amazon have outperformed the broader market over the past 52 weeks. AMZN has gained 25.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 17.8%. However, in 2024, shares of AMZN are up 6.1%, lagging behind SPX's 11.4% gains on a YTD basis.
Zooming in further, AMZN is also outpacing the S&P 500 Cons Disc Sector SPDR (XLY)'s 6.5% gains over the past 52 weeks.
Amazon has outperformed due to robust revenue growth across its North America, International, and AWS segments, leading to a substantial increase in net income and adjusted earnings per share. Additionally, the company's aggressive investments in AWS and strategic expansions in groceries and Internet access are expected to further enhance its market position and financial performance.
Moreover, the stock jumped 2.9% on Jul. 31 due to news of its expansion into underserved rural areas with enhanced one- and two-day delivery options, aiming to increase sales and reach 90% of U.S. customers. This growth strategy, combined with Amazon's leading position in e-commerce, cloud computing, and its role in the AI sector, contributed to the stock's rise.
For the current fiscal year, ending in December, analysts expect AMZN's EPS to grow 66.6% year over year to $4.73. The company's earnings surprise history is promising. It holds a solid track record of consistently surpassing the consensus estimates in each of the last four quarters.
Among the 45 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 42 “Strong Buy” ratings and three “Moderate Buys.”
This configuration has remained steady over the past three months.
On Jul. 30, UBS analyst Stephen Ju increased Amazon’s price target to $224 and maintained a “Buy” rating, anticipating significant long-term benefits from heightened AWS investments and strategic expansions in groceries and Internet access.
The mean price target of $227.81 represents a premium of 23.8% to AMZN's current levels. The Street-high price target of $250 implies a potential upside of 35.8% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
