How to Trade Amazon After Fiscal Q1 2024 Performance Report

Amazon is one of the world's largest cloud operators and retail giants. It is now moving into the world of AI with its billion-dollar investment in AI startup Anthropic. With a current market cap of $1.9 trillion, it could be the next $2 trillion company. Learn more about Amazon’s first-quarter 2024 performance and what analysts are forecasting for the stock below.

• The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.

Amazon Q1 2024 Performance

Here are some of the key highlights from the latest fiscal first quarter 2024 earnings report from Amazon: 

• Earnings per share of 98 cents vs 83 cents per share expected 
• Revenue of $143.3 billion vs $142.5 billion expected 
• Net income of $10.4 billion, compared to $3.17 billion a year earlier 
• Amazon Web Services revenue of $25 billion vs $24.5 billion expected 
• Advertising revenue of $11.8 billion vs $11.7 billion expected 

Amazon beat analyst expectations on most metrics with growth driven by its cloud computing and advertising divisions. Its operating income was up more than 200%, showing signs that its latest cost-cutting measures could be helping its bottom line.  

The Amazon Web Services division accounted for 62% of Amazon's total operating profit, with sales up 17% in the first quarter alone. The company has already laid off over 27,000 employees and more staff are set to leave several divisions.  

CEO Andy Jassy has focused less on acquisitions and more on growing its profitable divisions such as cloud computing, advertising and Prime membership. However, in the earnings call the management team stated that cost optimisations are tapering off so much of this benefit may already be priced in the share price.  

Amazon announced it will spend $2.75 billion on AI startup Anthropic - its largest investment to date. Anthropic is regarded as a potential leader in generative artificial intelligence and competes with OpenAI's ChatGPT. The investment would be on top of its initial $1.25 billion investment from September.  

It's not yet clear how the investment will add to the bottom line. In the earnings call, the management team stated there has been a lot of interest in future AWS generative AI products. One issue is that most of the future potential of AI may already be priced into the stock.  

From a charting perspective, the share price is trading around historical all-time highs which makes it susceptible to some profit taking on good news, leading to a sharper fall.

Amazon Stock Forecast - What do the Analysts Say?

According to analysts polled by TipRanks for an Amazon stock forecast in the past 3 months, there are currently 41 buy, 0 hold and 0 sell ratings on the stock. The highest price level for a Amazon stock forecast is $246.00 with the lowest price target at $200.00. 

The average price target for a Amazon stock forecast is $220.28.

An Example Trading Idea for the Amazon Stock Price

An example trading idea for the Amazon share price could be as follows:  

• Buy the stock on a break above $192.00 to allow for volatility. 
• Target just below the highest analyst price target of $246.00. 
• Keep your risk small at a maximum of 5% of your total account.   
• Time Line = 1 – 6 months  
• If you buy 10 Amazon shares:  
  • If target is reached = $540.00 potential profit [($246.00 - $192.00) * 10 shares].

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, as it currently trades at record highs leaving it susceptible to some profit-taking.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 20 shares in Amazon stock would result in a commission of $0.40 ($0.02 * 20 shares) for executing a per-side transaction.

However, there is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall! 

How to Buy Amazon Stock in 4 Steps  

With Admirals, you can buy shares with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 

1. Open an account with Admirals to access the dashboard.   
2. Click on Trade on one of your live or demo accounts to open the web platform.   
3. Search for your stock in the search window at the top right to view the live price chart. 
4. Click Create New Order from the bottom of the screen to open the trading ticket. 

Click on the banner below to trade Amazon stock today ▼▼▼ 

Do You See the Amazon Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.

If you believe there is a higher chance Amazon share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.

This means you can trade long and short to potentially profit from rising and falling stock prices.

INFORMATION ABOUT ANALYTICAL MATERIALS: 

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following: 

• This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
• Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
• With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
• The Analysis is prepared by an independent analyst Jitan Solanki, Freelance Contributor (hereinafter "Author") based on personal estimations.
• Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
• Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
• Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.