It has been a rough July for Amazon stock, with shares entering trading Monday down 7% since the start of the month. But analysts remain bullish on the tech giant with its second quarter earnings approaching next week.
Analysts at Bernstein and Truist each raised their price target for Amazon stock in separate notes to clients Monday. Amazon stock was ahead by a half-percent at 184.10 in morning trading on the stock market today.
The tech giant will report its second quarter results after the market closes on August 1. Shares have slumped this month along with other Magnificent Seven stocks. The group — which includes Microsoft, Apple, Nvidia, Alphabet, Meta and Tesla The group — shed more than $1 trillion in market cap last week.
Amazon Stock: What To Watch In Q2
Truist analyst Youssef Squali reiterated a buy rating and upped his price target for Amazon stock to 230 from 220.
Squali expects Amazon to report results ahead of expectations based on tracking North American sales using Truist credit card data. He also cited positive checks for Amazon's advertising business, with expectations for further revenue growth at the cloud-focused Amazon Web Services business, and improving unit economics and operating expense management.
"Amid a weakening consumer, Amazon continues to gain share of global e-commerce and improve its value proposition to both merchants and consumers," Squali wrote. "We see multiple growth vectors powering AMZN's growth which keeps the stock compelling, in our view."
Meanwhile, Bernstein reiterated a buy rating for Amazon and upped its price target for the stock to 215 from 210.
"We are buyers of Amazon's 2024-story marked by further operating income and free cash flow inflection, as the company should not only able to continue taking price (gains) but also remain efficient in their discretionary other bets projects," Bernstein analysts led by Nikhil Devnani wrote to clients Monday.
Bernstein added that Amazon is likely still the "most loved/crowded stock on large cap internet land."
The analysts trimmed estimates for Amazon's cloud business revenue and e-commerce sales in the quarter, but increased estimates for advertising revenue in the back half of this year. The ad estimate increase is based "off of strong buyer demand for Prime Video ads at the Upfronts and Cannes," the client note said.
Amazon Slumps With The Rest Of Mag 7
Amazon hit a milestone by crossing a $2 trillion market cap at the end of June. Shares broke out from a flat-base pattern's 191.70 buy point on June 26, according to MarketSurge. Amazon stock gained 3% on the day.
But Amazon has slumped since then, amid a broader drop for the Magnificent Seven Big Tech stocks. Amazon stock lost 2.75% for the week ending July 12 and another 5.8% last week.
While slightly higher this morning, Amazon shares sit below their 50-day moving average. Amazon stock has an IBD Composite Rating of 81 out of a best-possible 99, according to IBD Stock Checkup.
