Since the calendar turned to 2024, the US stock market found itself in a tough spot.
Amazon (NASDAQ: AMZN) is among stocks that had a slow start to the year, but despite that, the e-commerce giant’s impressive performance last year should not be overlooked.
Bolstered by a rapid expansion in the artificial intelligence (AI) space and the resilient recovery of the online advertising sector, AMZN soared, registering an impressive 80% gain. A linchpin among the Magnificent Seven stocks, Amazon played a pivotal role in steering the S&P 500 to a near-all-time high.
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Looking ahead, we embarked on January 4 on a nuanced analysis, probing whether Amazon can sustain its momentum in 2024 and dissecting analyst expectations that shape the narrative of this tech heavyweight’s trajectory.
Macro picture
Put simply, Amazon appears to be well-positioned to continue its uptrend in 2024, and the same goes for most of its technology peers. There are several factors at play.
Fueled by the burgeoning AI sector and a surprisingly resilient economy, equities climbed consistently last year, confounding the predictions of many on Wall Street. The much-feared recession, which had garnered unanimous concern among investors, failed to materialize.
Moreover, the Federal Reserve is expected to cut policy rates at least three times in 2024, which should lead to increased investor appetite toward risk assets.
However, the expected cuts come with their own risks. A sharp fall in rates could trigger an economic shock or renew recession fears. The group of select few stocks that propelled the market in 2023 could run out of steam. Also, looming presidential elections in the US and potential escalation in geopolitical tensions could also weigh on investors’ optimism.
Wall Street’s views
As Amazon kept dishing out stellar financial performances and robust stock returns last year, Wall Street analysts grew more optimistic about the tech giant’s outlook.
Several investment firms named AMZN stock among their top picks, including Wedbush,
JPMorgan, Evercore ISI, TD Cowen, and Bernstein, among others.
Wedbush was particularly bullish on the company, raising its 12-month price target on AMZN to $210, implying a potential upside of over 41% from Wednesday’s closing price.
Meanwhile, the consensus price target on its shares is $177.43, suggesting an upside potential of 19.5%. This is based on analysts’ coverages of the stock issued in the past 12 months.
AMZN technical analysis
At the time of writing on January 4, AMZN was trading at $148.47, down around 1% in the past 24 hours.
At this price, the stock is underpinned by a near-term support of around $145.8, followed by another one at $143.7. Losing these buttresses would pave the way for a decline toward the next major support at $138.68, where the 100-day moving average (MA) is located.
On the upside, the company’s shares may face resistance at $155.63, which is also their 52-week high. Clearing this barrier could allow the bulls to attack the next major resistance at $170.8, a level unseen since March 2022.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
