On August 1, Amazon (AMZN) will release its results for the second quarter of 2024. The company projects revenues of $144 billion to $149 billion, or a 7–11% increase over the previous year.
Amazon's Success: Cloud Business
The key to Amazon's success is its stronghold in the cloud and e-commerce sectors, which are supported by the company's developing generative AI capabilities. The company has demonstrated strong performance in the previous four quarters, as evidenced by its impressive revenue history and unanticipated events. It includes a 36.14% surprise in the most recent reported period and an average surprise of 48.17%.
One of the main reasons for Amazon's expansion has been its extensive Prime membership, which offers quick delivery options like Prime Free One-Day and Same-Day Delivery. Positive contributions have also come from a stronger distribution system and the expansion of grocery services. Amazon's financial performance has probably benefited from its expanding Prime membership base and worldwide e-commerce operations. Another benefit improving the company's prospects is the Prime RxPass, which provides prescription drugs for a fixed monthly fee of $5.
Amazon's Revenue: What To Expect?
Sales at Amazon's physical stores are anticipated to have increased; the general estimate of $5.25 billion for the second quarter of this year indicates an upsurge of 4.5% from the previous year. This expansion has probably been aided by the company's retail presence, which includes Whole Foods, Amazon Fresh, and Amazon Go retailers. It's also anticipated that breakthroughs such as the Amazon Dash Cart, which uses cutting-edge computer vision technology to improve the shopping experience, will boost in-store sales.
The company has benefited greatly from its partnerships with third-party sellers, whose sales are expected to increase to $36.3 billion, or 12.3%, this year. Amazon Music, which is ad-free and consists of Prime membership, has added to Prime engagement in the streaming space. Prime Video's growing original content and general portfolio may have spurred Prime engagement.
Amazon Web Services: A Key Revenue Generator
Another significant growth area is Amazon Web Services (AWS), whose performance is expected to have been significantly impacted by its growing cloud services portfolio, which is powered by creative AI technology and broadening data center networks. AWS sales have probably increased as a result of the deployment of Amazon Bedrock and the expansion of AWS areas and accessibility zones.
Amazon's hardware products, which include Eero WiFi systems, Blink security cameras, Fire tablets, and Echo smart speakers, have positively impacted its financial performance. Improved Alexa features should result in a better user experience and positive outcomes in the future.
Amazon's stock has increased 20.4% so far this year, outpacing both the industry and the S&P 500 index, which have increased 14% and 14.6%, accordingly.
AMZN Stock Forecast Technical Analysis
In the daily chart of AMZN stock price, ongoing bullish momentum is visible as the current price hovers above the dynamic 200-day Simple Moving Average. As long as the Amazon stock price trades above the 200-day SMA, the primary aim for this stock is to seek long opportunities.
In the volume structure, the buying pressure is still potent, at a significant level since November 2023, which is at 185.74, above the current price.
Based on the Amazon stock price prediction, an immediate bullish rebound with a daily candle above the 189.32 resistance level could offer a long opportunity, aiming for the 200.00 psychological level.
The alternative approach is to observe the price, where the near-term support level is at 166.38 level. In that case, a bearish correction is possible towards this line, creating a short opportunity from a valid bearish reversal from the 189.32 to 192.20 zone. However, a stable bearish trend might come after moving below the 166.38 support line, aiming for the 118.27 support line.
