Amazon may have been flying high over the past five years but the AMZN stock price has been rather volatile in recent months.
The online giant, which was founded by entrepreneur Jeff Bezos back in the 1990s, is the world’s fifth-largest company and has a $1.88 trillion market capitalization.
But although it continues to deliver strong quarterly results, the Seattle-based outfit has suffered from investor concerns about AI-related spending.
This has resulted in its shares slipping 11% in recent weeks and led to questions being raised about the direction in which Amazon’s projected stock price is going.
The AMZN stock price soared during the first half of this year and hit an all-time high closing price of $200 on July 2, 2024.
However, the outlook for Amazon stock was affected shortly afterward as technology stocks came under selling pressure.
This downward trend continued in August after the company published second-quarter results that underwhelmed the market.
So, what have been the major price drivers behind the previously bullish AMZN price action and what are analysts’ latest Amazon stock predictions for 2024, 2025, and beyond?
Key Takeaways
- Amazon continues to innovate and expand, heavily investing in AI and cloud computing and entering new markets like healthcare, which are key drivers for its future growth.
- Amazon Q2 2024 left Wall Street analysts underwhelmed, even though net income increased to $13.5 billion, up from $6.7 billion for the same quarter in 2023.
- AMZN stock hit an all-time high closing price of $200 in July 2024, but its performance has been more volatile since investors have become concerned about the high levels of AI-related investment.
- Analysts are generally optimistic about Amazon’s stock, with many maintaining a ‘Buy’ rating and predicting further growth, although projections vary widely.
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Summary of the Latest Amazon (AMZN) Stock Predictions
| Amazon Stock Forecast (as of August 21, 2024) |
1-Year Forecast | 2025 (December) | 5-Year Forecast (August 2029) |
|---|---|---|---|
| MarketBeat | $221.69 | – | – |
| WalletInvestor | $179.88 | $173.24 | $189.04 |
| TipRanks | $223.58 | – | – |
| Fintel | $226.19 | – | – |
Amazon Stock Analysis: Where Next For AMZN Stock?
Over the last 12 months, the Amazon (AMZN) stock price is up 32% from $134.68 to $178.88 as the market closed on August 20, 2024. Over the last five years, the stock is up even more at 104%.
However, it’s been a wild ride full of volatility for Amazon shareholders, with a massive rally in 2020 and 2021 that was almost completely wiped out in the 2022 bear market. It regained ground in the back half of 2023, while this year has been a rollercoaster.
So, in which direction is the next Amazon’s expected stock price movement?
The Latest Amazon News & Key Stock Price Drivers
Amazon, a titan in online retailing, dominates sectors such as e-commerce, electronics, and digital services. As such, its performance across all these verticals can affect Amazon’s share price performance.
Amazon Prime service boasts more than 200 million subscribers worldwide; its Alexa AI voice assistant is used across many electronic devices, including its own Echo brand; and AWS, its business cloud offering, is the cloud market leader.
In early August 2024, Amazon announced a 10% increase in net sales to $148 billion for the second quarter. This compared to $134.4 billion for the same period in 2023.
Net income, meanwhile, came in at $13.5 billion, or $1.26 per diluted share, compared with $6.7 billion ($0.65 per diluted share) for the previous year’s second quarter.
However, unlike other technology leaders such as Meta (META) and Alphabet (GOOGL), Amazon has not yet started paying dividends.
Amazon also highlighted a number of positives since its first quarter results were announced:
- 19 films and series released from Amazon MGM Studios, including season four of The Boys. This was number one on Prime Video in more than 165 countries.
- New AWS agreements signed with Commonwealth Bank of Australia, Databricks, Discover Financial Services, and Eli Lilly, among others.
- Announced an AUD $2 billion strategic partnership with the Australian Government to provide a top-secret AWS cloud.
- Replaced 95% of plastic air pillows in Amazon’s delivering packaging in North America with paper filler.
President and CEO Andy Jassy was pleased with the results. He said:
“We’re continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth,” he said.
He pointed out that AWS continues to be customers’ top choice as businesses look to “modernize their infrastructure” and move to the cloud.
Amazon Stock Forecast: Analyst Views
So, what are the Amazon stock expectations of analysts? What is their AMZN price target and where will the company go from here?
Dan Coatsworth, Investment Analyst at AJ Bell, believes the initial share price falls in the wake of the results announcement could be due to broader issues.
He said:
“Amazon’s share price slump comes in the middle of a broader risk-off shift in the market with investors worrying about when companies will make positive financial returns from the significant amount of money being spent on AI, and whether the US is facing a hard landing as economic indicators flash red.”
Coatsworth believes investors have begun to scrutinize big tech companies a lot more than they’ve done over the past few years.
“After lapping up significant share price returns as companies like Amazon enjoyed strong profit growth and were at the center of a new technology revolution powered by artificial intelligence, the wheels are coming off the AI bandwagon,” he explained.
While Amazon was on cloud nine, he pointed out, the tech giant could now be facing a more uncertain future.
“Billions of dollars are being spent on the infrastructure to support AI and there is only so long that companies can keep splashing the cash before questions are asked about returns on investment,” he said.
Morningstar raised its Amazon stock forecast to $195 per share from $193 in the wake of the company’s second-quarter results.
Dan Romanoff, a Senior Equity Research Analyst at Morningstar, said in his Amazon stock outlook on August 1, 2024:
“The company’s third-quarter outlook aligned with our revenue estimate and was better than our operating income estimate.”
He also highlighted the company’s near-term efficiency improvements.
“Amazon continues to take strides in efficiency improvements throughout the network, which helps lower costs and improve delivery speeds and ultimately drives increased purchases by Prime members,” he added. “After a pullback that began in early July, we see shares as increasingly attractive.”
Romanoff believes Amazon is well-positioned in generative AI and should benefit as the technology adoption gains steam.
“We think the company’s proprietary chips, Trainium and Inferentia, and Bedrock and other AI-related solutions, support this notion,” he said. “Management believes generative AI can add tens of billions of dollars to revenue over the next several years.”
According to Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, Amazon delivered a decent quarter, but you wouldn’t know that from the market’s reaction.
She said:
“Amazon’s cloud business (AWS) did its job, with sales growth accelerating quarter-on-quarter, quelling any fears that the resurgence in growth from the cloud business may be short-lived. But it was the guidance that spooked markets. AI spending is set to ramp up, and the impact on the profit line is making its way into guidance.”
Over the longer term, Streeter believes the ongoing shift toward e-commerce has room to run, although there are near-term hurdles to overcome.
“Despite big improvements from last year, margins in this area dipped quarter-on-quarter, and economic data from the US is starting to look sketchy,” she said. “While we don’t pay too much attention to short-term moves, trends are something to watch for, and we’ll be keeping a close eye on this.”
Ali Mortazavi, Head of Education at Errante, gave Techopedia his take on Amazon, paying particular attention to valuation and the recent record-high share price. He said:
“Amazon’s P/E is higher than the broader market average, and I think it is suggesting that investors are willing to pay a premium for its shares based on expectations of future growth. Nevertheless, the declining quarterly P/E ratio and rising net income over the past year suggests that Amazon is becoming a more attractively priced investment, despite its premium relative to the market, which reflects strong future growth prospects.”
Raed Alkhedr, Chief Global Market Analyst at Equiti Group, told Techopedia he sees Amazon’s expansion into health and grocery, as well as growth in cloud computing, as major upside catalysts from here. He said:
“Improving IT budgets and companies’ greater willingness to shift infrastructure to the public cloud remain catalysts for AWS in the longer run. Operating margin may continue to expand on cost cuts, efficiencies and rising contribution from cloud and ads. Amazon’s push for pharmacy and grocery are large undertakings that also serve as positive catalysts.”
Latest Amazon Stock Forecasts for 2024, 2025 & 2030
Amazon stock is rated as a ‘Buy,’ according to the views of 41 Wall Street analysts compiled by MarketBeat as of August 21, 2024. While 39 see it as a ‘Buy’ and one a ‘Strong Buy,’ one has it down as a ‘Hold’.
Their consensus one-year Amazon stock forecast 2024/2025 is for the price to hit $221.69, which is 24.39% higher than the $178.88 closing price on August 20, 2024. The highest prediction was $251 and the lowest was just $160.
The next question is, what will happen to Amazon’s future stock price?
The following table shows the 10 latest analysts’ Amazon stock predictions.
| Date | Analyst Firm | Action | Rating Change | Price Target | Percentage Change |
|---|---|---|---|---|---|
| 8/6/2024 | Morgan Stanley | Lower Target | Overweight ➝ Overweight | $240.00 ➝ $210.00 | +28.85% |
| 8/2/2024 | Rosenblatt Securities | Boost Target | Buy ➝ Buy | $220.00 ➝ $221.00 | +31.63% |
| 8/2/2024 | Royal Bank of Canada | Reiterated Rating | Outperform ➝ Outperform | $215.00 ➝ $215.00 | +28.73% |
| 8/2/2024 | Roth Mkm | Boost Target | Buy ➝ Buy | $210.00 ➝ $215.00 | +29.03% |
| 8/2/2024 | Bank of America | Lower Target | Buy ➝ Buy | $220.00 ➝ $210.00 | +26.03% |
| 8/2/2024 | Benchmark | Reiterated Rating | Buy ➝ Buy | $200.00 ➝ $200.00 | +19.13% |
| 8/2/2024 | Barclays | Boost Target | Overweight ➝ Overweight | $220.00 ➝ $235.00 | +45.47% |
| 8/2/2024 | Wedbush | Reiterated Rating | Outperform ➝ Outperform | $225.00 ➝ $225.00 | +34.81% |
| 8/2/2024 | The Goldman Sachs Group | Lower Target | Buy ➝ Buy | $250.00 ➝ $230.00 | +24.95% |
| 8/2/2024 | JPMorgan Chase & Co | Lower Target | Overweight ➝ Overweight | $240.00 ➝ $230.00 | +24.95% |
Source: MarketBeat as of August 20, 2024
At the same time, Amazon stock prediction 2025 of algorithm-based WalletInvestor is notably less optimistic, putting the stock at $179.88 in 12 months. By the end of 2025, it suggests AMZN could drop to $174.61.
Its five-year Amazon share price forecast, meanwhile, expects the stock to recover, albeit modestly, to $189 by August 2029.
It’s also worth noting that both analysts’ forecasts and algorithm-based projections might prove to be wrong because a company’s prospects will depend on a variety of factors and unknowns.
An Amazon stock forecast for 2030 isn’t readily available as stock market analysts and algorithm-based prediction platforms stop short of giving longer-term price targets.
The Bottom Line: Should I Invest in Amazon?
Investors considering whether to put their money into Amazon stock need to consider a number of factors, not least of which is their own objectives.
As we have seen this year, even relatively high-flying companies in fast-developing sectors can encounter turbulence in their stock prices. Amazon is no different.
Bulls will insist the company is the clear leader in e-commerce and has the financial firepower to continue investing in growth opportunities.
However, Bears will highlight the looming regulatory concerns for big technology firms and the ongoing cost of AI-related investment.
Of course, the Amazon stock projections also vary. That’s why it’s important to remember that even skilled analysts aren’t always right when it comes to their Amazon stock long-term forecasts.
Do your own research and always remember your investment decision depends on your attitude to risk, your expertise in the stock market, the spread of your portfolio, and how comfortable you feel about losing money.
The information in this article does not constitute investment advice and is meant for informational purposes only.
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References
- AMAZON.COM ANNOUNCES SECOND QUARTER RESULTS (S2.q4cdn)
- Ali Mortazavi Rad (Linkedin)
- Raed Alkhedr Acsi (Linkedin)
- Amazon.com (AMZN) Stock Forecast and Price Target 2024
(Marketbeat) - Amazon (AMZN) Stock Forecast, Price Targets and Analysts Predictions – TipRanks.com (Tipranks)
- Amazon Stock Forecast: up to 179.882 USD! – AMZN Stock Price Prediction, Long-Term & Short-Term Share Revenue Prognosis with Smart Technical Analysis (Walletinvestor)
