Amazon Stock Forecast: Will AMZN Break a New ATH on Strong Earnings?

Amazon Stock Forecast: Will AMZN Break a New ATH on Strong Earnings?

Jeff Bezos’s team at Amazon, now run by CEO Andy Jassy, is never far away from the latest innovations, and the firm is deep into cloud computing and now artificial intelligence. High growth expectations backed by investments in AI and strong earnings have made AMZN stock a top performer this year.

With a $1.82 trillion market capitalization, Amazon is the fifth largest company in the world. The AMZN stock price is up +15.5% year-to-date as of May 1, 2024.

Amazon (AMZN) Year-to-Date Price Performance
Amazon (AMZN) Year-to-Date Price Performance. Source: TradingView

The trend in AMZN stock price has been nearly straight up in 2024, so the outsized gains in such a short period raise the risk of a short-term pullback, but the strong momentum is indicative of strong demand among investors.

We look at the major price drivers behind the bullish AMZN price action and consider 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 Q1 2024 earnings topped Wall Street expectations, with profits tripling from a year ago thanks to advertising growth and demand for its cloud division, AWS.
  • AMZN stock has shown robust performance, particularly in the past year with a significant rise, although it faces resistance near its record high from 2021.
  • Analysts are generally optimistic about Amazon’s stock, with many maintaining a ‘Buy’ rating and predicting further growth, although projections vary widely.

Summary of the Latest Amazon (AMZN) Stock Predictions

Amazon Stock Forecast

(as of May 1, 2024)

1-Year Forecast 2025 (December) 5-Year Forecast

(April 2029)

MarketBeat $209.24
WalletInvestor $174.31 $169.39 $154.21
TipRanks $213.74
GovCapital $298.78 $1,158.43
Fintel $214.26

Amazon Stock Analysis: Stay Bullish or “Just Walk Out” on AMZN Stock?

In the last 12 months, the Amazon (AMZN) stock price has put in a blowout +66.75% positive return as of May 1, 2024. Over the last five years, the stock is up just a bit more at +81.06%.

However, it’s been a wild ride full of volatility for Amazon shareholders, with a massive rally in 2020 through 2021 nearly completely wiped out in the 2022 bear market only to be regained in the back half of 2023 through to the present.

Amazon shares now sit under resistance from the former all-time high set in July of 2021. Old multi-year highs can often act as areas for existing shareholders to ‘take profits’ and put downward pressure on the stock.

There has already been some evidence of a pullback in the past month around the $185 level.

So, where will Amazon stock go next?

Amazon (AMZN) 5-Year Price Performance
Amazon (AMZN) 5-Year Price Performance. Source: TradingView

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.

Amazon announced substantial growth in its first-quarter earnings, with profits soaring to $10.4 billion – a more than threefold increase – and revenues reaching $143.3 billion, surpassing Wall Street expectations.

This surge was driven by a 24% rise in advertising revenue and robust results from Amazon Web Services. Although the company has implemented significant cost reductions, including layoffs impacting over 27,000 employees, it anticipates sustained profitability, projecting revenues of $144 billion to $149 billion for the second quarter.

However, unlike other technology leaders such as Meta and Alphabet, Amazon has not yet started paying dividends.

President and CEO Andy Jassy highlighted AWS as a major growth driver in his conference call with Amazon shareholders:

“The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI capabilities is reaccelerating AWS’s growth rate (now at a $100 billion annual revenue run rate).”

Possibly the most important aspect for future AMZN share price returns is that the company is a disruptor, even as the fifth largest company in the world.

The next arena Amazon is looking to stamp its mark is artificial intelligence, clear from its addition of Dr. Andrew Ng, founder of an AI fund, to its board and the company’s massive $4 billion investment in Anthropic, a rival generative AI service to OpenAI.

Amazon’s earnings also show the sheer might of the company’s presence across multiple verticals. Andy Jassy, CEO of Amazon, highlighted in its letter to shareholders on April 11:

  • In 2023, Amazon’s total revenue grew 12% year-over-year (“YoY”) from $514 billion to $575 billion.
  • By segment, North America revenue increased 12% YoY from $316 billion to $353 billion.
  • International revenue grew 11% YoY from $118 billion to $131 billion, and AWS revenue increased 13% YoY from $80 billion to $91 billion.

Even as the company doubles down on investing in new growth areas like artificial intelligence, Jassy is committed to keep cutting costs in some areas:

“As we look toward 2024 (and beyond), we’re not done lowering our cost to serve. We’ve challenged every closely held belief in our fulfillment network, and reevaluated every part of it, and found several areas where we believe we can lower costs even further while also delivering faster for customers. Our inbound fulfillment architecture and resulting inventory placement are areas of focus in 2024, and we have optimism there’s more upside for us.”

Amazon Stock Forecast: Analyst Views

Morningstar raised its Amazon stock forecast to $193 per share from $185 previously after the company reported strong first-quarter results.

Dan Romanoff, a senior equity research analyst at Morningstar, said on May 1:

“We believe Amazon is well-positioned in generative AI and should benefit as the technology adoption gains steam.”

Romanoff also noted that Amazon’s profitability improvements have been ‘remarkable,’ and there is still room for further improvements.

“In retail, the regional hub model has yielded both cost savings and improved delivery speeds,” he added. “Strength in high-margin advertising was also a margin tailwind and should remain so in 2024 and beyond as ads make their way into Amazon’s streaming portfolio.”

Gil Luria, analyst at D.A. Davidson told Reuters Amazon’s future looks brighter now that companies are no longer cutting cloud computing budgets. He said:

“After a year and a half of cutting cloud costs, it appears that enterprise customers are ready to move more workflows to the cloud again, which is positive not just for Amazon, but also for many software companies that sell to enterprise customers.”

In his latest research note, JP Morgan analyst Doug Anmuth confirmed his positive recommendation for AMZN stock, keeping ‘Buy’ rating, and setting the price target at $240 from $225.

Anmuth agreed in his post-earnings note that higher infrastructure spending by corporates bodes well for future AWS revenues.

“AMZN’s increased capital intensity – which is mainly in AWS – is driven by increased demand for cloud services and GenAI,” he wrote. “We believe this is positive as AMZN has a very clear path to monetizing infrastructure investments through AWS, and a track record of favorable returns.”

Ali Mortazavi, Head of Education at Errante, gave Techopedia his take on Amazon, paying particular attention to valuation and the nearby 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.

 

“However, it is worth mentioning that Amazon’s stock is nearing its all-time high of approximately $189.80, a level that has repeatedly capped gains since 2021. To break through this critical resistance, the company will need earnings that surpass expectations.”

Raed Alkhedr, Chief Global Market Analyst at Equiti Group, told Techopedia he sees Amazon’s expansion into Health and Grocery, as well as counties’ growth in cloud computing, as major upside catalysts from here. He said:

“Amazon’s push for speed, convenience, and value, coupled with building momentum across retail, cloud and ads, position it well to deliver on its 1Q plan.

 

“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.”

Tom Forte, a 5* rated internet and technology equity analyst at Maxim Group, sees potential for Amazon to catch up on some of its valuation metrics vs. its big tech peers.

“It already trades at a meaningful P/E premium versus its big-tech peers. The big opportunities are to close the gap on its peers on an EV/Sales and EV/EBITDA basis, where it trades at significant discounts,” said Forte.

“With an increasing amount of sales derived from higher-margin services and less from lower-margin retail sales (including, potentially, from de-emphasizing grocery) this could enable the company to chip away at those large valuation gaps,” the analyst noted.

Latest Amazon Stock Forecasts for 2024, 2025 & 2030

There is currently a rating of ‘Buy’ on Amazon stock as of May 1, 2024, according to the views of 45 Wall Street analysts compiled by MarketBeat. There are 44 ‘Buy’ and one ‘Hold’ rating, with no analysts giving ‘Sell’ recommendations.

The average one-year Amazon stock forecast 2024/2025, according to MarketBeat, is for the price to reach $209.24, with the highest projection being $245 and the lowest estimate standing at $140.

The following table shows the 10 latest analysts’ Amazon stock predictions.

Date Analyst Firm Action Rating Change Price Target Percentage Change
5/1/2024 Stifel Nicolaus Boost Target Buy ➝ Buy $224.00 ➝ $228.00 +30.29%
5/1/2024 Barclays Boost Target Overweight ➝ Overweight $220.00 ➝ $230.00 +31.43%
5/1/2024 Citigroup Boost Target Buy ➝ Buy $235.00 ➝ $245.00 +40.00%
5/1/2024 UBS Group Boost Target Buy ➝ Buy $215.00 ➝ $217.00 +24.00%
5/1/2024 Wedbush Reiterated Rating Outperform ➝ Outperform $225.00 +28.57%
5/1/2024 Morgan Stanley Boost Target Overweight ➝ Overweight $215.00 ➝ $220.00 +25.71%
5/1/2024 Oppenheimer Boost Target Outperform ➝ Outperform $210.00 ➝ $220.00 +25.71%
5/1/2024 Rosenblatt Securities Reiterated Rating Buy ➝ Buy $220.00 ➝ $220.00 +25.71%
5/1/2024 Truist Financial Boost Target Buy ➝ Buy $216.00 ➝ $220.00 +25.71%
5/1/2024 Maxim Group Lower Target Buy $318.00 ➝ $238.00 +36.00%

Source: MarketBeat as of May 1, 2024

Fintel.io has calculated an average analyst estimate to put the AMZN stock price at $214.26 by next year, as of May 1, 2024.

A consensus AMZN stock forecast from 42 analyst views compiled by TipRanks suggests that Amazon could reach $213.74 in the next 12 months and has a ‘Strong Buy’ rating.

At the same time, the Amazon stock forecast 2025 of algorithm-based WalletInvestor is notably more bearish, putting the stock at $174.31 in 12 months’ time. By the end of 2025, it suggests AMZN could drop even further to $169.39.

Its five-year Amazon share price forecast expects the stock to decline to $154.21 by May 2029.

Meanwhile, another algorithm-based prediction platform, GovCapital, expressed the most bullish 1-year Amazon stock forecast, setting the AMZN target price at $298.78 for May 1, 2025.

Analysts and algorithm-based prediction platforms refrain from giving longer-term price targets. Therefore, Amazon stock forecast for 2030 is not readily available.

Note that analysts’ and algorithm-based projections might prove to be wrong.

The Bottom Line: Should I Invest in Amazon?

Deciding whether to invest in Amazon investors should consider its strategic investments in AI and cloud computing, as well as its expansions into the healthcare sector, which are expected to drive future growth.

The stock is still facing resistance near its record-high price set in 2021, indicating that breaking past these levels could be challenging, however, if earnings power is anything to go by, a breakout could be on its way.

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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Jasper Lawler
Financial expert
Jasper Lawler
Financial expert

Jasper cut his teeth on Wall Street as a stockbroker and honed his analytical skills with the City of London's top trading firms. Today, he applies his financial expertise to content creation as the founder of Trading Writers, a niche content marketing agency for the finance sector. Jasper's articles can be found on Techopedia, Seeking Alpha, UK Investor Magazine, Trade2win, Investing.com, FXStreet, Trading212.com, FlowBank.com, and Capital.com. His analysis has been quoted in prestigious publications such as the Financial Times, Bloomberg, Reuters, AFP, and City AM. Jasper's transition from stockbroker to content creator highlights his deep understanding of the financial markets…