SAN FRANCISCO - OCTOBER 11: Amazon logo on black shiny wall in San Francisco mall in California on October 11, 2015. Amazon is an American international electronic commerce company. It is the world's largest online retailer.
Amazon (NASDAQ: AMZN) stock price action is very difficult to predict in the current economic conditions. Amazon is one of the biggest and pioneering internet tech companies in the world. The tech giant was founded in 1994 by Jeff Bezos as Cadabra, Inc. in Washington.
Over the past three decades, the company has evolved from a garage-run business to one of the most valuable companies in the world. Let’s take a shot at Amazon stock prediction in the next few years.
You don’t have to be a stock market analyst to be able to tell how exceptionally well Amazon stock has performed this year. A 78% yearly surge for a multi-trillion dollar company like Amazon Inc. is quite extraordinary, to say the least.
Amazon stock is listed on the NASDAQ stock exchange, which is the second biggest stock exchange in the world. The shares trade under the ticker NASDAQ: AMZN. The current Amazon stock price is $145. This puts the company at a market capitalization of $1.38 Trillion. This makes it the fourth biggest company in the world.
In one of the most recent developments, the Federal Trade Commission (FTC) filed a lawsuit against Amazon on 26 September 2023. According to the regulator, the pioneering e-commerce platform allegedly leveraged its monopoly to inflate the prices of several products. Amazon stock price has been experiencing increased selling pressure since the news.
However, the company has responded to the lawsuit, suggesting that this may impact its ability to serve its customers effectively. According to Amazon’s top executive David Zapolsy, the lawsuit may result in slower deliveries for the customers and higher prices.
I’ll keep sharing my updated price outlook on Amazon & other stocks in my free Telegram group, which you’re welcome to join.
The ongoing hawkish stance of the US Federal Reserve may change as inflation is cooling down in the United States. According to the recently released October 2023 CPI data, the YoY inflation came at 3.2%. This was slightly lower than the market forecast of 3.3% and resulted in a strong surge in US equities, including Amazon shares.
Amazon has recently released its Q3 earnings in which the tech giant reported $143.1 billion in revenue. This was a 13% increase from last year. Additionally, the company also generated $9.9 billion in net income which was a phenomenal 240% surge from last year’s figure.
The third quarter results were taken very well by the markets as the stock price rebounded from $118.35. Since then, Amazon stock has been up 12.3% and is aiming for more upside.
NASDAQ: AMZN chart shows that the price has broken above the $146 resistance level, but bulls are struggling to gain momentum. There also seems to be a rejection from the 0.618 fib retracement level which lies just a few points above this resistance level.
Amazon stock price forecast may turn very bullish if the price gains strength above the $146 level. This may trigger another rally towards its next resistance of $160. On the other hand, a breakdown below $146 will invalidate the bullish outlook, putting lower price targets on the cards.
The strong earnings report in the first quarter of 2023 has triggered a strong rally in tech shares. Nevertheless, my Amazon stock prediction is not that bullish for the rest of 2023. This is due to the deteriorating macroeconomic conditions and the banking concerns in the US.
Investors are expecting the FED to keep interest rates high till the middle of 2024. These conditions won’t be ideal for the tech sector stocks like Amazon. The soaring 10-year treasury bond yield is also causing headwinds for the growth stocks.
Despite a decrease in inflation in the past few months, it is quite unlikely that it will come below 2% anytime soon. Therefore, analysts are expecting a recession in the second half of 2023. This may send the tech stocks to their fresh lows. A possible bottom for Amazon stock could be the December low of $65. Hence Amazon stock prediction 2025 of $65-$100 seems quite logical.
To be honest, Amazon stock prediction 2030 is anybody’s guess. Nobody knows how the ongoing Ukraine conflict could’ve ended by then. The ongoing power struggle between US and China could’ve further intensified by then. Nevertheless, if Amazon keeps innovating and maintains a strong global footprint, we may see the stock hitting news all-time highs before 2030.
To predict the price action of any stock for 2040 is really a shot in the dark. By that time, we might have seen a lot of innovations in the realms of artificial intelligence, blockchain, and metaverse. If Amazon keeps itself at the cutting edge of these growing fields, it can maintain its stronghold in the tech world by 2040.
Nevertheless, many innovative companies that are currently nowhere close to Amazon may give it a run for their money in the coming years. Therefore, it is very risky to bet on any business considering such a broad time horizon.
Amazon stock price is currently 38% down from its 2021 all-time high. Considering the hawkish Fed policies and high interest rates. The stock seems to be overvalued at the moment. It seems pretty logical to wait for a Fed pivot or another major pullback in US equities before buying any tech stocks right now. However, from a long-term perspective of 3-5 years, the stock still seems to be a good investment.
It is also worth mentioning here that for tech giants like Amazon to thrive, the whole global economy needs to expand at a rapid pace in the coming year. This might not be the case if the US Federal Reserve fails to deliver a soft landing in 2024-2025.
You can buy Amazon shares from any reliable online broker. These brokers provide different investment products to gain exposure to Amazon stock from the comfort of your home. You just need to go to a physical stock exchange to buy the shares. Robinhood, Exness, TD Ameritrade, Fidelity, and Interactive Brokers are some of the most popular online brokers.
While Amazon stock prediction is not bullish for the coming months, the stock can still perform great in the coming years. Therefore, one must decide the timeframe of investment in Amazon shares before buying.
Amazon stock price appears to be very hot right now due to strong earnings and revenue in the first quarter of 2023. However, the deteriorating US economy may trigger another pullback soon. Furthermore, the upcoming decisions of the US Federal Reserve will also keep the equity prices in check during the rest of the year. As it is with any other stock, you need to determine the objectives and the time frame for your investment before buying.
This post was last modified on Nov 29, 2023, 14:43 GMT 14:43