Amazon Stock Price Prediction is Revised Lower to $142

Amazon Stock Price Prediction is Revised Lower to $142

Amazon Web Services plans to launch an infrastructure region in Thailand to help developers, startups, etc to run their applications

AMZN Price and Performance Chart

Amazon Stock Forecast: Recent Performance

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Amazon Stock Forecast: Latest News

  • Goods to be delivered with keeping our eco system in mind – Amazon has purchased 1000 ev fleets from Rivian. It is working diligently with Rivian to achieve its aim of  zero carbon emission.  Amazon’s customized ev will come with built alexa and routing system.
  • Establishing a logistic network  segment –  Amazon is expanding into building a logistic networking and transportation segment in India. Amazon will be providing the transportation services to 3rd party Merchants and direct-to-consumer brands in India. It mentions on the site that it has partnered with Shiprocket, Unicommerce, Easyecom, Clickpost and Vinculum for order and delivery management systems.
  • Freezes its hiring process – An internal company announcement came through mails to recruiters that so on and so forth it shall not be recruiting for all the corporate roles in the store business division.
  • AWS plans to launch an infrastructure region in Thailand: Amazon Web Services plans to launch an infrastructure region in Thailand to help developers, startups, etc to run their applications and ensure the customers keep their data if required. It plans to develop data centers to bring advanced cloud computing services to organizations. It plans to invest more than $5 billion in the next 15 years.
  • Amazon plans to expand its delivery vans: Amazon is planning to expand its European electric delivery vans on roads to 10K electric vehicle vans and 1.5k electric heavy goods vehicles by 2025. They are also planning to invest around $1B to decarbonize their transport network in the next 5 years.
  • AWS and BMW’s partnership: AWS and BMW collaborated to develop a cloud software vehicle data platform. This is aimed to simplify the distribution and management of data from connected vehicles. They are also planning to make this software available to other automakers too.

Why is the stock declining today?

Amazon dropped by -12.14% in the past week.

  • Interest Rates and Inflation – Interest rates hike tightens the Monetary policy leading to a contractionary environment i.e, e a period of time when businesses run slow and there are liquidity constraints in the country’s economy, thereby it becomes a rational behavior to park money in high returns generating financial instruments than to go on a spending spree, for instance purchase a blender on Amazon. Another reason for the Amazon stock price slip is the high inflation in US. The overall economy is hampered because of a sharp upturn of inflation from 1.4% in 2020 to 8.02% in 2022. Again, it compels the consumer to make fewer purchases and save more money for the future
  • Recession affecting Tech Companies – Due to the recessionary environment, Tech companies listed across the nazdaq platform has performed weakly around the past few days for reference purposes, Companies like ACI (17.43%), SNAP(3.84%), Airbnb (13.99%), BABA (12.03%) and CVNA (59.42%) as of 07/11/22.
  • High expenses that ate up profits – In the previous quarters the operating expenses were $118 billion and in this Quarter it has grown to $124 billion. This is primarily due to increased shipping, fulfillment, and transportation costs; high wage rates and incentives; and fulfillment network inefficiencies.

Amazon Stock Forecast: Latest Video

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Amazon Stock Price Prediction: 12-Month Forecast

Amazon Stock Forecast for the next 12 Months$142
Credit Suisse$142
BofA Securities$137
Truist Financial$160

Amzn Stock Forecast: Bull Case

  • Profitable Cloud Business: – It is true that Amazon’s major revenue comes from e-commerce business, but the cloud business (Amazon Web Services) is quickly catching everyone’s attention and is becoming the most profitable one for Amazon Inc. AWS revenue in 2021 came at $62.2 billion – an increase of 37% YoY. It could soon become a $100 billion revenue stream.
  • New Partnerships with Rivian, Meta, and Other Companies– What builds confidence in AWS is its new line of customers which includes Rivian, Under Armour, Goldman Sachs, Meta Platforms, and many other such marquee customers. It speaks volumes of demand for cloud-based business and AWS is giving tough competition to Google. AWS generated an $18.5 billion operating profit in 2021, an impressive 37% increase YoY. The positive reaction can be seen after the Q2 earnings reports were out, as many analysts increased their price targets and also gave a ‘buy’ rating.
  • Advertising Sector – Next gem in the making is the advertising sector for Amazon. Amazon for the first time split up advertising revenue in the latest quarter earnings. It reported $9.7 billion in revenue in the fourth quarter, an increase of 33% YoY. Amazon provides advertising services to wide segments of customers including sellers, suppliers, customers, etc. Live sporting events can add significantly to the revenue in coming years as Amazon has recently done 11 years agreement with NFL to telecast Thursday Night Football.

Amazon Stock Forecast: Bear Case

  • Persistent Labour Issues- Recently Retail, Wholesale, and Department Store Union (RWDSU) accused Amazon of interfering illegally in a union election in Alabama. It is accused that Amazon officials have removed union literature from its break room and limited access. It may be true or false, but the fact is that these unfair treatment accusations against Amazon are not new and it appears that Amazon is trying to hinder unionization rather than improving relations with labor. It could hurt Amazon’s business in the future.
  • Lower Operating Margins in E-Commerce Business- Amazon’s e-commerce business reported $407 billion in revenue for the 2021 calendar year. But, despite good top-line growth operating margin has decreased YoY. In North America, the operating margin was 3%, representing a 1% decline from 2020. The international segment reported an operating loss margin of negative 1% in 2021, compared to a 1% positive in the year prior. This decline in operating profit was due to labor supply issues and supply chain disruptions. These are expected to continue in 2022.
  • Declining Cash Flow – As a matter of fact, Amazon’s trailing 12-month cash flow decreased 30% YoY to $46.3 billion and free cash flow has come to a negative $9.1 billion for the past 2 months ended 31 December 2021. Free cash flow was positive at $31.0 billion for the trailing 12- months ended 31 December 2020.

Amazon Inc: Q3 Earnings

  • Revenue is up from $110.8 B to $127.1 B [Year on Year]
    • AWS Revenue is up 27% to $20.5 B
  • Operating Income down from $4.9 B to $2.5 B
    • AWS Operating Income is up from $4.9B to $5.2B

Read: DWAC Price Prediction

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.

Vineet Agarwal

Amazon Stock Price Prediction is Revised 10% Higher to $176


Vineet Agarwal is a trained technical analyst and avid stock trader. A graduate from a Top Technology Institute, Vineet carries out extensive technical and secondary research for this authored stock forecasts.