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Amazon.com, Inc. (AMZN), headquartered in Seattle, Washington, is the world's largest online retailer and marketplace. The company engages in the retail sale of consumer products, advertising, and subscription services through online and physical stores. With a market cap of $1.9 trillion, its products include books, music, computers, electronics, and numerous other products. Amazon offers personalized shopping services, web-based credit card payment, and direct shipping to customers. It also operates a cloud platform offering services globally.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and AMZN definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the internet retail industry. With a strong global presence, Amazon continues to expand its influence and market share worldwide. Additionally, Amazon's massive scale allows for cost efficiencies, competitive pricing, and significant investment in innovation. The company's focus on technological advancements, particularly in AI and cloud computing through Amazon Web Services (AWS), and its customer-centric approach further enhance its market leadership.
Despite its notable strengths, AMZN has slipped 12.7% from its 52-week high of $201.20, achieved on Jul. 8. Over the past three months, AMZN stock dipped marginally, underperforming the Nasdaq Composite’s ($NASX) 5.8% gains during the same time frame.
In the longer term, AMZN shares rose 17.5% on a YTD basis, underperforming NASX’s 18% returns. However, over the past 52 weeks, AMZN’s solid 32.3% gains outperformed NASX’s 27% surge.
To confirm the bullish trend, Amazon has traded above its 200-day moving average over the past year, with slight fluctuations recently. However, the stock is trading below its 50-day moving average since early August.
AMZN's solid market momentum can be credited to its leadership in the cloud industry, with AWS offering a wide range of AI tools. The company is poised to benefit from the growth opportunities in the cloud market. Additionally, Amazon's e-commerce segment is expected to see newfound growth with potential rate cuts. The partnerships with social media giants also seem promising. AWS has been a major player in the AI revolution, with companies transitioning to cloud services for AI capabilities. This migration trend is expected to continue in 2024, further boosting Amazon's growth.
On Aug. 1, AMZN reported its Q2 results, and its shares closed down more than 8% in the following trading session. The company’s revenue stood at $148 billion, up 10.1% year over year. Its EPS increased 93.8% year over year to $1.26.
In the competitive arena of technology, Apple Inc. (AAPL) has taken the lead over Amazon, showing resilience with an 18.9% uptick on a YTD basis. However, AMZN stock outperformed AAPL’s 24.4% gains over the past 52 weeks.
Wall Street analysts are highly bullish on Amazon’s prospects. The stock has a consensus “Strong Buy” rating from the 45 analysts covering it, and the mean price target of $224.51 suggests a potential upside of 25.8% from current price levels.
On the date of publication, Neha Panjwani 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.
