With a post-election rally following a strong third quarter report, Amazon stock broke out to record highs earlier this month. Shares of the tech giant have gained 35% so far this year but recently pulled back from record highs to hover near a former buy point.
With an up-and-down 2024 following a bounce-back 2023, Amazon investors are debating what it will take for Amazon to keep climbing to new heights. Amazon's third quarter results eased some doubts. But – as is typical for a stock as massive as Amazon – several investor debates remain. Analysts are debating the position of Amazon's cloud business for artificial intelligence against Microsoft and whether it can keep improving its retail profitability amid a challenge from Walmart, Temu and Shein.
So is Amazon stock a buy? Here's what to know about recent stock action and news for the tech giant:
Amazon Stock Pulls Back Near Consolidation Buy Point
Amazon stock is ahead 1% at 203.95 in recent trading on the stock market today.
Mirroring the broader market, Amazon pulled back from highs with a 4% slide on Friday and a slight decline in Monday trading. The retreat placed Amazon stock back within a buy zone that extends to 211.26, following a breakout from a 201.20 consolidation pattern buy point, according to MarketSurge.
Shares broke out on Nov. 6 as part is up a fraction at of a broader rally following the election of Donald Trump to a second presidential term.
With Tuesday's gains, Amazon stock is finding support at its short-term 21-day moving average. Shares reached a record 215.90 before pull back in trading last Thursday.
Amazon's Relative Strength Rating sits at 81 out a best-possible 99. That means Amazon has outperformed 81% of stocks in the IBD database over the past 12 months. IBD recommends focusing on stocks with at least an 80 RS Rating.
The IBD Stock Checkup tool shows Amazon stock holds an IBD Composite Rating of 90 out of a best-possible 99. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Amazon stock holds an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in institutional ownership for a stock over the past 13 weeks. The current rating indicates more buying than selling by institutions.
Investors also will want to check out IBD's Big Picture column for the current market direction before considering any buy points. Further, here is a guide to understanding IBD's rating system.
Amazon Stock Jumps 6% On Strong Earnings
Amazon stock rallied 6.2% to close at 197.93 after reporting third quarter earnings on Oct. 31.
Amazon beat expectations with a 52% increase in earnings, to $1.43 per share. Sales growth of $158.9 billion, up 11% year-over-year, also beat expectations.
Shares gained despite Amazon's revenue forecast for its holiday quarter coming in slightly lower than expected. Also, third quarter sales for the tech giant's closely-watched Amazon Web Services cloud division came in slightly lower than anticipated.
But Amazon's Q3 operating income of $17.4 billion cruised past Wall Street estimates of $14.7 billion, according to FactSet.
Operating income was "the main metric everyone was worried about" before the report, Stifel analyst Mark Kelley said in a client note. Analysts had been debating how long Amazon could continue the steady profitability boost seen under Chief Executive Andy Jassy. The company is spending billions on chips and new data centers to power its AI ambitions. It is also ramping up spending on its Project Kuiper satellite internet initiative.
Amazon Stock: Analysts Up Targets Following Q3 Report
The thirty-year-old Amazon is among the world's most valuable companies. It is a leader in e-commerce spending and in cloud-computing through its Amazon Web Services business. It is also quickly growing its advertising business into a challenger to Google and Meta. Amazon joined the blue-chip Dow Jones Industrial Average earlier this year.
Despite a revenue miss in the second quarter that contributed to a summer slump for Amazon, Wall Street analysts are mostly positive on Amazon stock.
Of the 69 stock analysts following Amazon, 94% have a buy rating, according to FactSet.
As of Tuesday, the average target price for Amazon stock from analysts is 235.46, according to FactSet, up from 221.65 at the end of October. The average target price implies roughly 15% upside from Amazon's price as of mid-day Tuesday.
Wedbush analyst Scott Devitt reiterated an outperform rating to Amazon stock following the Q3 report and increased his price target to 250, from 225.
"Amazon has now reported operating income above the high end of its guidance range for the seventh consecutive quarter and the company has a number of drivers for future margin expansion in place," Devitt wrote to clients, "including continued cost efficiencies within its fulfillment network as well as the ongoing mix shift towards higher-margin AWS and advertising revenue."
Amazon Market Cap
You can check for Amazon's current stock price here. Amazon's market cap was $2.15 trillion, as of Nov. 19. Here is how the stock has grown over time:
| Time Period | Amazon Stock % Gain | S&P 500 % Gain |
|---|---|---|
| Year-to-Date | 34.5 | 24 |
| Previous 12 Months | 40.8 | 31.1 |
| Three Years Ago | 10.6 | 25.8 |
| Five Years Ago | 133.22 | 89.5 |
| Since 1997 Amazon IPO | 227,016 | 598.8 |
