Amazon stock price rose on Friday, up by 1.5 percent to trade at $189.66 at the time of writing. The e-commerce and cloud computing giant will announce its third quarter earnings on October 31, setting its stock up for increased volatility in the intervening period. The company is expected to report sales of $157 billion with its EPS rising by 21 percent year-over-year to $1.14.
Despite the rosy earnings expectations, some analysts expect its margins to take a beating as a result of expenditure on Project Kuiper. Designed to provide satellite internet connectivity to 500 million customers, the project is a direct take on market leader, Starlink. According to Morgan Stanley analysts, Amazon (NASDAQ: AMZN)could take a $1.5 billion hit on its books as a result of expenditure on Project Kuiper.
Amazon stock has been in consolidation since late September, making the earnings report a near-certain inflection point. However, it trades marginally above the 20-Exponential Moving Average (EMA) level of $187.39 on the daily chart, signaling bullish control in the near-term.
Tipranks reports that the stock’s 12-month outlook has an average price target of $224.38 based on the analysis of 47 analysts. That gives a headroom of 18 percent from the current price. On the higher side, the forecast is at $265.00 transalating to a potential head room of 39 percent. On the lower side, the forecast is at $183.00 giving it a floor of -3 percent from the current price.
The momentum on Amazon stock price signals bullish control, with the pivot at 189.25. That will likely see the stock rise to encounter the first barrier at 190.55. However, a stronger upward push could break above that hurdle to test 191.60.
Alternatively, the sellers will take control if the action breaks below 189.25. With that, initial support could come at 188.55. However, if the downward momentum persists, the action could break below that level to render the upside narrative invalid. Meanwhile, the decline could extend to the second support at 187.60.
This post was last modified on Oct 18, 2024, 19:18 BST 19:18