Amazon stock, Amazon stock price prediction

The disruption of society and business due to the coronavirus pandemic has battered the stock market, but Amazon (AMZN) is uniquely positioned to perform well in light of changes in consumer behavior. But is Amazon stock a buy right now?

The e-commerce giant reported first-quarter earnings on April 30 with mixed results. Revenue of $75.5 billion beat expectations but adjusted earnings missed widely, causing Amazon stock to drop the following day. It reported a loss of $5.01 per share, vs. estimates of $6.34.

Still, Wall Street analysts focused on the positives in the report and raised their price targets in response.

The coronavirus crisis has led to a majority of Americans staying safe at home, and working there, too. As a result, consumers have increasingly turned to buying goods online, where Amazon is the dominant leader.

The impact of the coronavirus will continue to take a toll on the global economy until it is contained. But not all markets are equally impacted.

"E-commerce is likely one of the biggest beneficiaries," Wedbush analyst Michael Pachter told Investor's Business Daily. "E-commerce is likely to see a permanent shift away from offline stores."

#. Amazon shares just hit an all-time high


Amazon CEO Jeff Bezos, already the world's richest man, has even more to celebrate. Amazon shares topped the $3,000 mark for the first time ever Monday as tech stocks continued to soar.

Amazon (AMZN) is now worth more than $1.5 trillion, joining Apple (AAPL) and Microsoft (MSFT) above that lofty level. This has helped push the Nasdaq to an all-time high above 10,000. Google owner Alphabet (GOOGL) topped the $1 trillion mark Monday, too.

These four tech giants, along with Facebook (FB), are now collectively worth more than $6.4 trillion.

Tech stocks have led the market's stunning rebound from its March lows on expectations of strong sales and earnings growth — despite the fact that the US economy is now in a pandemic-induced recession.

Shares of Netflix (NFLX), Tesla (TSLA), Square (SQ), PayPal (PYPL), Nvidia (NVDA) and Adobe (ADBE) all hit record highs Monday.

So did Zoom Video (ZM), Peloton (PTON), Lowe's (LOW), Clorox (CLX) and Teladoc (TDOC) — companies that have benefited greatly from the shift to a work-from-home and shelter-in-place reality.

Amazon Stock Rises From One-Year Low

Today Amazon shares 

Amazon stock has climbed about 68% since hitting a one-year low on March 16. The stock's relative strength line punched to a new high on March 23, showing how its performance rates vs. the S&P 500. However, the RS line has recently pulled back some.

Prior to the Covid-19 outbreak, Amazon stock was stuck in a long phase where it moved only sideways, as investors seemed wary about big investments and market pressures facing the e-commerce giant. Those holding Amazon stock fretted over the potential negative impacts of investments on infrastructure, competitive pressures in cloud services, increased spending on its one-day shipping program and the impact that might have on profits.

But the coronavirus has changed everything. The resulting tidal wave of new demand for household and home office supplies has created bottlenecks and shortages.

Hiring Workers To Meet Spiking Demand

In order to fulfill spiking demand, Amazon hired  100,000 additional workers and then added another 75,000 workers.  The company also increased the investment it's making to boost the salary of employees, to more than $500 million, from $350 million.

That additional hiring and coronavirus buying helps to explain how Amazon's first-quarter revenue climbed 26%, beating estimates . That was its best growth in six quarters.

Few companies have created such a large and lengthy runway of opportunities as Amazon. It paid $13.4 billion to acquire Whole Foods Market in 2017, moving into groceries and food delivery. Amazon also continues to invest heavily in cloud computing, transportation, video content and online video services, competing against Netflix (NFLX) and others. And it leads the market in smart speakers with its line of products called Echo.

Founded as a simple online bookstore in 1994, Amazon never seemed to rest on its laurels and eventually became the leading provider of e-commerce services. The company is known for making bold moves and leaving competitors with the jitters when it does.

An example of that is Amazon's announcement that it would offer free one-day shipping to its best customers. Amazon, which announced its one-day shipping plan last year, initially committed to spending $800 million on the program. Management later indicated that they expect to spend another $1.5 billion.

Amazon Carves Out New Markets

Among its bold moves into new markets, Amazon is merging into the transportation field. Amazon is a big investor in Rivian,pumping $700 million into the electric truck maker one year ago. Amazon Chief Executive Jeff Bezos said the company had placed an order for 100,000 electric delivery vans from Rivian, a Michigan-based startup. It was also among the investors in a $530 million funding round for self-driving auto startup Aurora Innovation.

Amazon also is exploring the health care market, having acquired online pharmacy company PillPack last year for just under $1 billion.

Not all of its ventures succeed. But many agree it's willing to take bold steps that sometimes turn into big winners.

Among its biggest success stories is Amazon Web Services. Revenue from AWS, the market leader in cloud computing, climbed 32% in the first quarter to $10.2 billion, meeting estimates. It reported operating income of $3.08 billion, accounting for the bulk of company profits. Moreover, advertising revenue remained stable, at a time when spending on advertising is shrinking. Among other positives in the Amazon earnings report, online grocery orders for delivery surged 60%.

Amazon Stock Forecast By Month.

YearMoMinMaxCloseMo,%Total%
2020Jul251930602680-6.9%-6.9%
2020Aug239326992546-5.0%-11.6%
2020Sep2513283326735.0%-7.1%
2020Oct2639297528075.0%-2.5%
2020Nov2770312429475.0%2.4%
2020Dec2805316329841.3%3.7%
2021Jan266530052835-5.0%-1.5%
2021Feb2798315629775.0%3.4%
2021Mar2872323830552.6%6.1%
2021Apr2887325530710.5%6.7%
2021May2980336031703.2%10.1%
2021Jun283131933012-5.0%4.6%
2021Jul273330812907-3.5%1.0%
2021Aug2869323530525.0%6.0%
2021Sep272530732899-5.0%0.7%
2021Oct2861322730445.0%5.7%
2021Nov3004338831965.0%11.0%
2021Dec3088348232852.8%14.1%
2022Jan3242365634495.0%19.8%
2022Feb308034743277-5.0%13.8%
2022Mar3126352533251.5%15.5%
2022Apr296933493159-5.0%9.7%
2022May295733353146-0.4%9.3%
2022Jun3105350133035.0%14.7%
2022Jul3260367634685.0%20.5%

Amazon Fundamental Analysis: Double-Digit Growth

Amazon has maintained its double-digit revenue growth for years. To that point, revenue in 2019 climbed 20% from the previous year.

For the current quarter, Amazon expects revenue in the range of $75 billion to $81 billion. The midpoint of $78 billion matched Wall Street estimates. That would be a 23% jump from the year-ago period. But, it expects operating income in the range of a $1.5 billion loss to a profit of $1.5 billion. That compares with an operating profit of $3.1 billion in the second quarter of 2019.

Amazon said the outlook was "subject to substantial uncertainty," due in part to the Covid-19 pandemic. Analysts were expecting operating income of $4 billion in the second quarter.

In remarks after first-quarter results posted, Bezos said Amazon initially expected a second-quarter operating profit of $4 billion. Instead, that money will be spent on "Covid-related expenses getting products to customers and keeping employees safe." However, analysts looked beyond the higher costs with some high praise on its plans for the road ahead.

"To us, AMZN is the ultimate 'stay-at-home stock,' " FBN Securities analyst Shebly Seyrafi wrote in a note to clients. He retained an outperform rating and raised his price target on Amazon stock to 2,550, from 2,200.

While Seyrafi hiked his target price more than 15%, he remained at the low end of the spectrum. Overall, the increase from other analysts brought Amazon's price targets into a range of 2,550 to 3,000.

Amazon Stock Analysis

A fundamental analysis of Amazon stock is a key component of determining whether it's worth buying.

The IBD Stock Checkup Tool shows that Amazon stock has a strong IBD Composite Rating of 98 out of a best-possible 99. The rating means Amazon stock currently outperforms 98% of all stocks in terms of the most important fundamental and technical stock-picking criteria.

It also has a Relative Strength Rating of 88, which measures a stock's price performance over the last 12 months against that of all other stocks.

It has a healthy EPS Rating of 82, which compares quarterly and annual earnings-per-share growth with all other stocks


Amazon.com Inc (AMZN)


Is Amazon Stock A Buy Right Now?

Amazon stock is currently not a buy.

The stock is extended well past a cup-without-handle entry. It's also holding above a 2,525.55 three-weeks-tight entry, and shares are pretty much extended from that follow-on buy point. It's trading near a record high and is a full position on Leaderboard.


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