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Amazon Stock Analysis: Strong Bullish Trend with Potential Upside

StockInvest.us, 3 weeks ago

Amazon Technical Analysis

Amazon.com, Inc.'s (AMZN) latest closing price of $179.54 shows a moderate increase by 1.30%. The trading range was between $175.98 and $179.93. The stock is currently trading above its 50-day moving average of $177.42 and well above the 200-day average of $150.18, indicating a bullish trend over the medium to long term. The Relative Strength Index (RSI) of 45 suggests that the stock is neither overbought nor oversold, providing room for upward or stable price movement in the near term.

The MACD (3-month) at 3.04 is positive, indicating upward price momentum. However, Average True Range (ATR) of about 2.17 points towards moderate volatility. The support level at $174.42 and resistance at $180 can provide pivot points for traders in the forthcoming sessions.

Fundamental Analysis

Amazon's market capitalization stands at $1.84 trillion, underscoring its significant position in the market. A Price-Earnings (PE) ratio of 60.84 reflects high investor expectations of future earnings growth, typical for tech giants but high relative to broader market averages. Amazon's earnings per share (EPS) is $2.91, and with an upcoming earnings announcement on April 30, 2024, investor focus will likely intensify, potentially increasing stock volatility.

Analyst sentiment compiled shows a consensus towards a "Buy" with 39 analysts suggesting a buy and only 3 holds. With target prices ranging widely from $84 to $270, the median target of $185 suggests potential upside from the current levels.

The news of scrutiny from UK competition watchdogs over AI deals might introduce some caution among investors due to potential regulatory challenges.

Amazon Recent News Impact and Long-term Potential

Amazon's selection by Nextech3D.ai as a cloud provider for AI services reflects its strength in cloud infrastructure and services, a segment that continues to grow robustly. However, the fine by the Italian antitrust regulator might raise concerns over potential similar issues in other regions, affecting investor sentiment.

Amazon's long-term investment appeal remains strong with its dominant position in e-commerce and cloud computing. The company's continuous push into AI and expansions in global infrastructure support a favorable long-term outlook.

Intrinsic Value and Investment Potential

The Discounted Cash Flow (DCF) calculation of $47.27 suggests the stock might be overvalued based on current fundamentals. However, considering Amazon's growth trajectory in cloud computing and AI, these calculations might underestimate future revenue streams.

Overall Evaluation

Based on the above analysis, AMZN stock is classified as a "Hold" for the next trading day and upcoming week given the current market conditions and upcoming earnings report. Investors should monitor the earnings release closely for potential adjustments in their positions. For long-term investors, AMZN presents a favorable profile as a "Buy" asset, given its solid growth prospects in strategic technology domains and robust market position, despite regulatory challenges and valuation concerns.

Check full Amazon forecast and analysis here.