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Amazon’s stock has barely budged since the rally to a record high of 3,552 last September, despite the spectacular earnings in the previous quarter.
Back in 1995, the company went into business as an online bookstore, but after almost two decades it has transformed into one of the world’s largest inventive multinational technology companies which provides services in e-commerce, cloud computing, digital streaming, and artificial intelligence.
Particularly, total revenues are expected to have soared by 38.2% to $104.65 billion, holding within the guidance of $100 -106bln, while per-share earnings are said to have surged by 90% to $9.55.
The web services section , which is a giant component of the e-commerce business and a frontrunner to Microsoft’s Azure, will be again on top of mind given its juicy margins.
Online stores, which are the largest source of revenue and which faced extreme demand during the pandemic, will be next on investors’ check lists as the vaccines and the falling infections in the US are expected to motivate normal outdoor shopping in the coming quarters, reducing sales for Amazon.
Of course, the larger and more diversified it gets, the more challenges it has to tackle as reflected by the mushrooming battles it has against allegations of anticompetitive business practices, and more recently accusations of violating labor law.
Therefore, its guidance for Q2 could again grab greater attention, with investors eagerly waiting to hear how the reopening phase could evolve for Amazon under the new CEO Andy Jassy.
Note that Tesla and Apple have recently completed stock splits as well, and despite Bezos’s reluctance, traders hope that the new CEO Jassy will be more generous to them, especially to those who missed the pandemic rally.
Amazon has dropped in the list of the best performing components in the S&P 500 community over the past year, currently hovering slightly above the average of 45% as lofty valuation seems to be weighing on demand.
Alternatively, a downbeat guidance could pressure the price towards the 3,330 – 3,200 region formed by the simple moving averages.
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