Given Amazon’s (NASDAQ: AMZN) solid Q4 results, the company has begun to shift investor sentiment towards its stock as it works on its future growth.
The dominant leader in e-commerce announced its fiscal fourth-quarter results on February 3, publishing a strong earnings report that included several positive events. In particular, the company blew away analysts’ expectations in terms of earnings per share with $5.80 compared with the $3.57 forecast.
Furthermore, net revenues increased by 22% year on year, and the business made a significant profit from its investment in electric vehicle manufacturer Rivian (NASDAQ: RIVN) $1.2 billion.
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Moreover, Amazon published disaggregated figures on advertising revenue for the first time, with the category seeing a 32% year-over-year (YoY) increase, reaching $9.7 billion.
In addition, the Amazon Web Services (AWS) segment, which accounts for 33% of the global cloud infrastructure service market, increased net sales by 40% YoY.
Amazon chart analysis
The long-term trend is still negative, but the short-term trend is neutral. For instance, in the last month, AMZN has been trading in a wide range between $2707.04 – $3276.69. Currently, Amazon is in the middle of this zone, thus suggesting that stock traders may encounter some resistance above.
To determine if an asset is in an uptrend or a downtrend, investors look to the 20-day, 50-day, and 200-day simple moving averages (SMAs). It’s worth mentioning that AMZN is below all of its SMA lines; despite recent momentum, it is still down -4.30% on its 20-day SMA.
Amazon is presently trading in the middle of its 52-week range, which is in line with the S&P500 Index, also trading in the middle of its zone.
As a result of the reduction in volume volatility, AMZN presents a favorable setup opportunity. There is a resistance zone just above the current price that begins at $3152.79 and a support zone that begins at $2852.86 from a horizontal line just below the current price in the weekly time frame.
Wall Street’s outlook on Amazon in 2022
For the next 12 months, 32 Wall Street analysts forecast Amazon’s stock price based on the company’s recent performance in the last three months. The price objective ranges from $5,000 to $3,600, with an average anticipated price increase of 35.11% from $3,103.34 to $4,192.97.
Based on the price predictions of the 32 TipRanks experts’ stock recommendations for AMZN over the past three months, all 32 advocate that investors should “Buy,” while none recommend that investors should “Hold” or “Sell.”
Consequently, the average rating for Amazon stock is “Strong Buy,” with a potential upside of 35.11% over the next 12 months.
Can Amazon hit $4,000 in 2022?
As previously mentioned, Amazon’s AWS segment is also the market leader in cloud infrastructure services, and it is projected that the majority of the company’s profit growth will come from this high-margin area.
Data presented by Finbold indicates that Amazon Web Services accounts for the largest share of cloud infrastructure service providers at 33%.
Strong results in AWS and advertising illustrate the rising strength of the company’s diversification strategy as Meta (NASDAQ: FB) might be losing some market share to Amazon, while the strong AWS statistics reaffirmed the continuous increase in business computing into the cloud.
Given that the acquisition of MGM Studios will reinforce the video streaming service, assisting it in growing the number of Amazon Prime customers. Along with the firm announcing that it will increase the price of its Amazon Prime membership for the first time since 2018 after the release of its results, it may have boosted investor confidence in the stock, making it one to watch in 2022.
Thus, considering Amazon’s recent announcements about AWS, advertising, and its core e-commerce earnings exceeding expectations, together with its planned price increase for Prime membership, the company is fundamentally well-positioned to deliver on the estimates to hit $4,000 by the end of the year.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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