E-commerce juggernaut Amazon (AMZN) is one of the magnificent seven stocks in the US stock market and currently has massive buy momentum. According to an analysis by Keithen Drury from The Motley Fool, 96% of Analysts have given AMZN a buy rating as Q4 rolls on. The stock is up to 189.56 per share, a slight 4% uptick compared to the start of Q3 2024.
AMZN will reveal its Q3 2024 earnings report on October 31. Analysts anticipate another strong quarter for the company, with its focus shifting towards higher-margin services and Amazon Web Services (AWS). Market expectations are becoming more realistic compared to Q2, but analysts remain optimistic about the company’s performance over the last quarter.
According to Amazon’s estimates, the company’s operating income for Q3 could be between $11.5 billion and $15 billion. The company’s Chief Executive Officer, Andy Jassy, highlighted three macro trends that could boost growth. These include cost optimization efforts, modernizing infrastructure, and leveraging AI (artificial intelligence). The latter trend, AI, has been a growing sector throughout 2024 and will have a role in the company’s upcoming earnings report.
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Amazon Stock To Continue Growth Following Q3 Earnings Report?
Amazon stock saw a decent share price growth of 17% on the NASDAQGS over the last few months. The recent share price gains have brought the company back closer to its yearly peak. Now, the Mag 7 member is expected to post great numbers in Q3, along with the rest of the top stocks.
“The Mag 7 are still expected to post superior (and presumably more reliable) earnings growth than the rest of the index,” DataTrek co-founder Nicholas Colas said. On the other hand, despite the optimism ahead of the Q3 earnings report for Amazon, some experts still say the stock is trading higher than it should be.
Also Read: Apple: Will AAPL hit $250 Before Q3 Earnings Report?
Amazon.com appears to be expensive, according to analysis from Simply Wall St. The stock’s ratio of 44.67x is currently well above the industry average of 19.91x, meaning that it is trading at a more expensive price relative to its peers. Typically, it is not wise to buy a stock when it is at its highest, as there is more potential to sink than swim. Since Amazon.com’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, Simply Wall St suggests.
Amazon Web Services recently announced its plan to explore the nuclear sector by signing a contract with Dominion Energy, Virginia’s utility company. As AWS explores new horizons in AI, the firm needs clean energy resources to bolster its AI products and services, pivoting towards the nuclear sector to help generate possible solutions. The move could also boost the company’s value, thus pumping share prices amid interested investors.