Amazon Stock Forecast 2023, 2025 and 20230
Amazon Stock Forecast 2025: This article covers Amazon stock’s latest performance along with the forecast for the upcoming years.
Latest Amazon Stock Price
Amazon Stock Performance Last 12 Months
- Last 1 Month: +7.3%
- Last 6 Months:-12.2%
- Last 12 Months:-40.8%
Amazon is a multinational technology company known for its online shopping and cloud platform. Amazon is one of the world’s largest online retailers, with a presence in numerous countries around the globe. Added to it Amazon with its AWS platform is now the leader in the cloud computing platform.
Amazon is listed under the ticker symbol AMZN on NASDAQ. It is one of the most valuable companies and it is one of the FAANG stocks, the publicly traded stocks of U.S. technology giants like Facebook, Apple, Google, etc.
Amazon Stock Analyst Forecast
|AMZN Price Target 2023||$141|
Amazon Technical Analysis
Amazon recently unveiled its new satellite internet technology known as Kuiper. With this Amazon is set o challenge SpaceX’s Starlink for satellite internet supremacy.
After this announcement, Amazon has added one more arm to its business. Known for its e-commerce and its cloud computing business, Amazon has now added a new revenue source. Amazon is hopeful of benefitting from this move as the global demand for seamless interconnectivity has grown exponentially.
Talking about Amazon stock, here is how Amazon performed this year:
- January: +20.2%
- February: -12.3%
- March*: +8.8%
- YTD: +16.8%
Performance on the last Trading Day
- Open Price: $97.24
- Close Price: $100.25
- Gain/Loss: +3.10%
- Overall Market Cap: $1.02 B
Amazon stock surged on Thursday after being on a downtrend for the last couple of days. Amazon is once again above $100 and on the last trading day, Amazon was able to outperform the NASDAQ index.
The surge in the stock price of Amazon can be attributed to the rumors that the company was considering the acquisition of AMC entertainment. AMC has 600 movie theaters in North America, Europe, and the Middle East. This will not just help Amazon in adding a new revenue source but it will help the company advertise its various products like its Amazon Prime Membership, tech gadgets, etc.
However, there has been no official confirmation from the company the news of the acquisition led to the surge in the stock price of both Amzona and AMC.
Considering technicals for Amazon stock, on the 4-hour timeframe chart below, Amazon is on the uptrend. The stock price is above $100 and now the buyers have an opportunity to push the stock above $110 as Amazon faces no resistance below $110. The first level of resistance for Amazon stock is at $113.
The support for Amazon is $97. This has been a stable support and the buyers have been able to keep the Amazon stock price above this level.
However, if Amazon stock fails to hold on to this support, it will likely retest the 50-day MA which is around $96. The 200-day Moving average for Amazon is $94.05. The net Amazon stock price is above both the 50-day as well as the 200-day Moving Averages.
The RSI for Amazon is 59.44. It confirms the bullish momentum of Amazon. The RSI has moved above the 14-day and it will likely rise as more buyers have entered the market.
The indicators like Stochastic RSI and the MACD indicator are also contributing to the bullish momentum of Amazon stock. On the MACD chart, both the MACD line and the signal line are within the bullish axis. The MACD line is now testing the signal line from below. The volume histogram bars are now forming on the bullish axis.
On the Stochastic RSI chart, the Stoch RSI is on the uptrend. After the consolidation within the oversold territory, the Stoch RSI is on the rise. It indicates more buyer participation.
Overall Amazon is bullish for the next trading day.
Amazon Stock Forecast Today
|1. Market's Wisdom||Partially Negative|
|1a. Market Data||Negative|
|1b. Technical Recommendation||Buy|
|2. Crowd's Wisdom||Partially Positive|
|2a. Social Media Buzz||Steady|
|2b. Social Media Sentiment||Neutral|
Amazon Stock Forecast 2030: Amazon’s Position Within E-Commerce Industry
The e-commerce industry has experienced significant growth in recent years, driven by technological advancements, changing consumer preferences, and increased internet access.
Amazon is a dominant player in the e-commerce industry, with a significant market share in various regions. In the US the e-commerce business is totally dominated by Amazon. Amazon has around 50% market share in the US as per the latest data. Here is how the US e-commerce market share stands as of now:
- Amazon: 49.1%
- eBay: 6.6%
- Apple: 3.9%
- Walmart: 3.7%
Factors affecting the e-Commerce Industry
Growth of Online Shopping: Online shopping has been on a rise with the growing internet and easy connectivity. More people are now shifting to online shopping than traditional shopping.
Growth of Mobile Commerce: Mobile commerce is also on the rise, as more consumers use their smartphones and tablets to shop online. Retailers are increasingly investing in mobile-friendly websites and mobile apps to cater to this growing trend.
Personalization: Consumers now expect personalized experiences when shopping online, with tailored recommendations and relevant content. E-commerce companies are leveraging data analytics and artificial intelligence to provide personalized experiences that improve customer satisfaction and increase sales.
Apart from e-Commerce domination, Amazon is the leading giant also in the world of cloud computing. Amazon’s AWS competes with Google’s Azure.
As per the latest data, Amazon and Microsoft dominate the Cloud market. However, is ahead of Microsoft. Here are the latest stats:
- Amazon AWS: 34%
- Microsoft Azure: 21%
- Google Cloud: 11%
- Alibaba Cloud: 5%
Amazon Price Target 2023: Analysts
Amazon Stock Price Predictions 2023 to 2030 (Aggregated)
- Amazon Stock Price Prediction 2023 is $148
- Amazon Stock Price Prediction 2024 is $183
- Amazon Stock Price Prediction 2025 is $207
- Amazon Stock Price Prediction 2026 is $223
- Amazon Stock Price Prediction 2027 is $252
- Amazon Stock Price Prediction 2028 is $284
- Amazon Stock Price Prediction 2029 is $318
- Amazon Stock Price Prediction 2030 is $346
Amazon Stock Forecast 2023: Financial Performance (Q4 2022)
Amazon reported its Q4 earnings and the revenue was up against the estimation.
- Fourth-quarter net sales also increased 9% to $149.2 billion, compared to $137.4 billion in the fourth quarter of 2021.
- Amazon’s net sales for 2022 increased 9% to $514 billion, compared with $469.8 billion in 2021.
- Amazon Web Services sales increased 29% year over year to $80.1 billion.
- Amazon’s advertising services unit brought in $11.6 billion in sales for the fourth quarter, a 19% year-over-year increase.
- Amazon’s reported net income decreased to $300 million.
- Amazon reported a net loss of $2.7 billion for 2022 compared to a net income of $33.4 billion for 2021.
- The operating income of Amazon decreased to $2.7 billion in the 4th quarter of 2022.
- Earnings: 3 cents per share
- Revenue: $149.2 billion.
Estimation for Q1 of 2023
Amazon expects to post first-quarter revenue of between $121 billion and $126 billion, representing year-over-year growth of 4% to 8%.
Latest Amazon News
Amazon to Expand is Same Day Delivery
Amazon is expanding its same-day delivery service. With this expansion plan, Amazon is hoping of expanding its footprints in the area that it has not been successful in penetrating.
Amazon Business Launches New AbilityOne Storefront
Amazon’s Staff to Face Pay Reduction
Amzon’s stock price has been falling. The fall of Amazon’s stock over the past year is hurting the company’s stock-heavy compensation plan. The fall of Amazon’s stock price will lead to employee pay reduction than the target compensation.
Amazon Employees Plan to Fight Against Return-to-Office Policy
Amazon has recently asked its employees to return to the office and end working from home which came into effect after the Coronavirus pandemic. The staffers have been expressing their anger over the policy. Some staffers are even planning to fight against the policy.
Read: Tesla Stock Forecast 2023
How is AWS Slowdown Affecting the Overall Amazon Profitability?
Amazon’s Q4 earnings were better than what the market had expected. However, one of the main profitable wings of Amazon, AWS is facing growth resistance. AWS in the past has been a major driver in Amazon’s pool of revenue. For the last few years, AWS growth has been around 30-40% but now the rate has fallen below 30% and there is a fear of the growth rate falling below 20%.
The Q1 of 2023 could be a disaster as the month of January saw only around 15-17% growth. The recent drop in Amazon’s share was the result of the AWS slowdown. However, this slowdown could be temporary and in coming years, cloud computing is predicted to witness massive growth. This means Amazon’s AWS could benefit from it. But at the moment the Amazon stock price is likely to remain lower as the AWS growth stalled.
AMAZON Stock News
- Amazon illegally resisted New York City Union Drive: Amazon Inc. has been found violating federal labor law. As per the report, Amazon resisted unionization at two facilities in New York City. As per the hearing by a National Labor Board Judge, Amazon illegally threatened to withhold wage increases and improved benefits if workers elected a union.
- Amazon Expected to First Unprofitable Year Since 2014: Amazon will be publishing its Q4 result and there is not much excitement among the investors as Amazon is likely to report its first unprofitable year since 2014. In the first 9 months, Amazon reported roughly $3 billion in total losses.
Will Amazon Stock Recover?
To understand if Amazon will recover and go up, we must first understand the various ratios determining the performance of the company from its previous data. Here is how Amazon performed on different ratios:
- PE Ratio – 89.18
- Price to cashflow – 25.30
- Price to Book Value – 7.20
- EV/EBITDA – 20.67
- Return on Capital Employed – 4.53%
PE Ratio: This ratio compares a company’s share price to its earnings per share. The average PE of Amazon from 2015 comes to around 156 which means that Amazon is undervalued in its own rights at the moment. The industry average PE is also around 150.
Price to cash flow: It compares a company’s market value to its operating cash flow and the lower it is, the more undervalued a stock is. Looking at the historical ratios, we can say that Amazon is fairly able to maintain an average of 25 since 2015 which means that it is not that undervalued at the moment. Last year it was 37, so one can say that if compared to that, it is undervalued right now.
Price to Book Value: It is used to compare a firm’s market capitalization to its book value. P/B ratios under 1 are the ones that attract most of the value investors. If compared to how it was for Amazon over the years, it has halved in value and this is a good sign for investors as the books and assets of the company are getting corrected.
EV/EBITDA: This measure is used to determine the value of a company. The best use of this ratio happens when it is compared with the industry average. It values the company, debt included, to the company’s cash earnings less non-cash expenses. Amazon.com’s EV / EBITDA for fiscal years ending December 2017 to 2021 averaged 33.8x. Amazon.com’s operated at a median EV / EBITDA of 29.2x from the fiscal years ending December 2017 to 2021.
Return on Capital Employed: This percentage is used to check the company’s capital efficiency and profitability. It can simply be interpreted as a higher value means higher the company’s profitability. In this case, Amazon is at a low of what it was in 2017. It had maintained an average of 9.2% since 2015 and that’s a bit concerning to see the return fall below 5%. Looking at these numbers, Amazon looks very much undervalued right now and can be a good buy.
Considering all the ratios, Amazon is undervalued right now and it is a good buy for long-term investment.
Will Amazon Reach $1000?
Amazon.com Inc. recently became the world’s first public company to lose a trillion dollars in market value. The AMZN share price has been falling and it has been below $100 for quite some time. However, the investors remain hopeful of AMZN stock price hitting new highs in the future. Once such an expected high is Amazon reaching $1000 in the near future. However, attaining this milestone will be a tough task as it will need the maximum involvement of investors who are ready to hold the AMZN stocks for a longer period.
Apart from this, the overall macro factors like inflation, monetary policies of the government as well as earnings should be favorable to attract more buyers.
In order to ascertain when and how AMZN can reach $1000, we will use past as well as future prediction data from different sources.
Since the Q4 AMZN earnings are yet to be published, the Q3 data is considered for the past two years. An overall 15% growth was witnessed. Therefore taking the current stock price, in 2028, AMZN stock could reach $1000. With 15% YOY growth AMZN will be valued $1011.
Amzn Stock Forecast 2023: 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 2030: 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.
Factors to look out for in 2023
- AWS and ad Revenue are the bright spots – In the recent quarterly dull results, it is the AWS sector and ad revenue that stands out. One of the key growth drivers of AWS- the cloud computing segment sales jumped 27% to $20.53 billion and the segment’s operating income increased 11% to $5.4 billion. Although AWS is used to growing at more than 30% in each quarter, 27% growth is also worth mentioning.
Its other sector is digital advertising which is the third largest ad platform only behind Google and Facebook. In the recent results, advertising revenue jumped 25% to $9.54 billion, approaching the $40 billion annual sales target. Although Amazon does not report the operating income for advertising, it is close to 30% as observed from peers like Google and Facebook.
So, while e-commerce sales can be a bit sloppy in 2023, it will be AWS and ad revenue that can give Amazon an extra edge. These sectors should be looked out for separately in 2023.
- The meaningful acquisitions – Amazon has been on an acquisition spree since 1999. Today, one of the most loved digital gadgets Alexa was bought by Amazon as Alexa’s internet business in 1999 for a too small amount to be disclosed. Alexa was nothing back then, but now it is an important artificial intelligence system connecting Amazon’s smart home and personal assistant devices.
Over the years, Amazon has made many more such acquisitions. But for 2023, there are two which are worth mentioning. The first is a $3.9 billion buyout of One Medical, which can give Amazon wings to enter the healthcare sector. It is a primary care service with a presence in over 200 locations and 24/7 access to virtual care.
Second, was the acquisition of Whole Foods in 2018. The $13.7 billion buyout added 472 physical stores to Amazon’s all-digital sales model. Although it accounted for 3.6% of total Amazon sales last year, the chain is evolving quickly as we discuss Amazon shares.
For 2023, to be the year for Amazon Inc, one of its acquisitions, either One Medical, Whole Foods, or Roomba maker iRobot has to click and significantly to its revenue and profitability.
- Everything Boils Down to Valuation – Valuations are very important in this high-inflation market, where investors are dumping “highly valued growth stocks”. For Amazon, the current dip in the stock price has cooled off its valuations to a large extent. The TTM price-to-sales ratio is only 1.84 which has come down from highs of 4.30 and 3.65 in 2020 and 2021 respectively. This is one of the lowest in past six years.
Moreover, AWS and ad revenue are key strengths of Amazon which will not allow the sales to go down in 2023. The price-to-earnings ratio of 82 looks a bit high on the surface, but it had the same EPS in 2020 and 2021. Also, it is due to dropping earnings per share from 3.30 in 2021 to 1.11 in 2022. It is likely to move upside down in 2023, and hence valuations will be further down.
Amazon Stock Forecast 2025: Valuations
While Amazon’s predicted earnings for FY 2023 are 1.82, the EPS trend is on the great upside, thus estimates may continue to rise. Shares of AMZN are currently trading at a P/E ratio of 89x based on the forecast EPS of 1.82. This is pointing out the fact that Amazon is only going to increase heavily in its earnings in the coming time. This translates to a PE of 51.2. Depending on how harsh the recession will be, Amazon will find a way to keep its earnings on track.
The earnings forecast and future cash flows are very highly valued. From the PE valuation point, it looks overvalued but it has always been the case with Amazon. The industry average of PE is 150 with the retail sector average of 32. So, all in all, Amazon is fairly valued now with a good opportunity to buy if one is to look at their predicted earnings for the coming years.
Amazon Stock Forecast 2023: Conclusion
As we know that the global environment of high inflation and economic woes is temporary. Therefore, to conclude, Amazon has weathered the difficulties maturely and is poised to grow better in 2023. For example, the company is working on a stronger cost structure which is a big plus for the long term. Also, Amazon is attracting more and more customers towards Prime subscriptions through NFL Thursday Night Football premier and many other such shows.
Most importantly, Amazon Inc has diversity in its business. Apart from being its moat in E-commerce, AWS is its growth engine and ad revenue has just started to gain the spotlight. Hence, it is important to believe in the business model of Amazon. Additionally, the recent dip presents a good opportunity for investors to add it to their portfolio for 2023.
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.