E-commerce giant Amazon will release its latest earnings after the market closes on Tuesday. Here are what analysts expect and the price levels to watch.
AMZN – Daily Chart
AMZN opened at nearly $184 on Monday. For earnings, the resistance is at the $189.75 level, and support is at the $172.34 level.
Amazon is set to release its first-quarter results on Tuesday after a surge in investor interest, which has led to a 20% share price gain since the start of the year.
Analysts have predicted that Amazon’s first-quarter sales will range between $138bn and $143.5bn, a year-on-year growth rate of 8% to 13%. The firm’s operating profit is expected to be between $8bn and $12bn, potentially more than doubling the $4.8bn achieved for the same period last year.
Earnings per share are expected to hit $0.82 for the first quarter compared to $0.31 in 2023. Analysts put particular emphasis on the company’s cloud business, Amazon Web Services (AWS), and its advancements in generative artificial intelligence.
“Amazon is a winner in the race to lead, and monetise, the development of generative AI, thanks in particular to its cloud-service business AWS which makes far more money than the US and International retail arms and is the real heart of the business now,” AJ Bell analysts wrote.
AWS continues to outperform expectations with double-digit sales growth, while the Prime video subscription service is also seeing traction in the media streaming market. Amazon generated $40.2 billion in revenue through its Prime membership in 2023, after adding members and revenue yearly since 2016. Amazon management believes that generative AI can add tens of billions of dollars to the company’s revenue over the next several years.
The company recently announced a new budget grocery delivery service for Prime members, aiming to compete further with similar offerings from Walmart and Target.
With an almost $2 trillion market cap in April, Amazon now ranks third among the world’s most prominent publicly traded companies, behind Meta and Nvidia.