Amazon’s outlook makes $200 per share a tall order
Amazon released its first-quarter earnings and sales figures. LSEG polled analysts, who predicted $142.5 billion in revenue and 83 cents per share in earnings. Expectations were also exceeded by the advertising and Amazon Web Services businesses. The business’s sales projection for the second quarter was lukewarm. Analysts were expecting $150.27 billion, Amazon predicts sales for the upcoming quarter of $144 billion to $149 billion, which represents an increase of 7% to 11% from the quarter last year.
Amazon, which had finished a cost-cutting and layoff initiative, also issued a cautious near-term sales estimate and a warning that capital spending will rise over the year.
On Wednesday, the stock closed at $179, near its 52-week high of 189.77. Traders wonder if the stock will rise above $200 per share.
In the first quarter, Amazon’s revenue increased 12.5% YoY. The business’s North America division recorded a 12% yearly growth to $86.3 billion. Amazon Web Services (AWS) sales, although it increased 25% year over year. AWS sales surged by 25% year-over-year to $25 billion, and sales in the foreign segment had a 10% year-over-year growth to $31.9 billion.
However, following its first-quarter report, Amazon stock appears to be a wise investment in the long term, this is because artificial intelligence boosts the company’s strong demand for AWS, creating opportunities for its e-commerce division to experience huge efficiency improvements. Long-term prospects for the market leader in technology are still quite bright, even if second-quarter sales guidance missed Wall Street’s target.
“AWS customers are also quite excited about leveraging genAI to change the customer experiences and businesses,” the company’s chief executive officer continued.
“We expect the combination of AWS’s reaccelerating growth and high demand for genAI to meaningfully increase year-over-year capital expenditures in 2024, which given the way the AWS business model works is a positive sign of future growth.”
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