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Amazon stock forecast: Analysts rate AMZN as a ‘buy,’ projecting a 20% rise

Amazon stock forecast: Analysts rate AMZN as a ‘buy,' projecting a 20% rise
Jordan
Major
2 months ago
3 mins read

Amazon, Inc. (NASDAQ: AMZN) stock had a sluggish start to the year but has subsequently gathered pace ahead of the e-commerce behemoth’s quarterly report, which is expected to be released after the market closes on July 29.

The United States Department of Defense has terminated its deal with Microsoft (MSFT) for cloud computing as the Joint Enterprise Defense Infrastructure, or JEDI, contract no longer meets its requirements. As a result of the terminated deal, Amazon shares reached a new high, recently soaring almost 5% in response to the announcement.

Amazon stock climbed slightly by 0.34% to $3,585.20 on Wednesday. AMZN shares are trading above its 20-50-200-day simple moving averages (SMA), which is a positive sign for those looking to purchase the stock, which is now in a buy zone, although with an elevated risk, the buy zone stretches to $3,701.21.

AMZN 20-50-200 day SMAs. Source: Finviz.com data

This was the stock’s second straight day of gains in a row as the firm finished $187.88 lower than its 52-week high ($3,773.08), which it achieved on July 13th when it broke out of a cup-with-handle base and setting new highs for three days in a row before reversing. 

Wall Street experts’ forecast

According to 32 Wall Street analysts’ 12-month price predictions for Amazon in the previous three months, the average price goal is $4,305.81, with a high estimate of $5,500.00 and a low of $3,775.00 expected. The average price forecast reflects a 20.10% increase over the previous price of $3,585.20.

AMZN analyst price target. Source: TipRanks.com

Furthermore, based on the price projections of 32 TipRanks experts’ stock recommendations for AMZN over the previous three months, all 32 advise ‘Buy,’ while none favor ‘Hold,’ or ‘Sell.’ On the basis of their recommendations, the consensus rating for Amazon stock is a ‘strong buy,’ with a 20.10% upside, making an attractive buy for both traders and investors.

The firm announced first-quarter earnings of $15.79 per share, above expectations of $9.54 per share and up 215% year over year, while its revenue also increased by 44% to $108.5 billion, above expectations. In addition, Amazon’s cloud computing sales increased 32% year on year to $13.5 billion in the first quarter making $4.16 billion in operational profit.

Analysts attribute Amazon Prime to a multi-year climb in AMZN stock and link advertising as another source of growth for the firm in 2021. Since about half of all adults in the United States start their product search on Amazon. 

Widely followed tech analyst Brent Thill of Jefferies confirmed:

“I think the power of AWS and their advertising and other software parts of their business and subscription models are the most exciting.” 

Moreover, Needham analyst Laura Martin stated, “Ad revenue growth will be a significant upside profit driver for Amazon in 2021.”

On Tuesday, Amazon founder Jeff Bezos successfully traveled to space on a suborbital trip on a New Shepard rocket that lasted 11 minutes. Still, Bezos was chastised for flying as Amazon employees toiled.

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Jordan Major
Author

Jordan is an investor and market analyst. He's passionate about stocks, ETFs, blockchain, and digital assets. At Finbold.com, he delves into the technicalities to obtain future trends for new market traders and gives insights into user-friendly platforms for beginners.