Amazon (AMZN) stock has had a strong year, overcoming a mid-year slump to post a gain of more than 45% in 2024. The stock rallied in the final months of the year, though it has seen slight pullbacks recently.
The company’s growth has been fueled by optimism surrounding its massive e-commerce operations and Amazon Web Services (AWS), its cloud computing business. However, investors are keeping a close eye on competition in these areas, particularly with Microsoft (MSFT) in cloud-based artificial intelligence (AI) and challengers like Walmart (WMT) and Chinese newcomers Temu and Shein in e-commerce.
Recent Stock Performance
Amazon shares are currently trading near $223.10 after pulling back slightly from their December 16 record high of $233. Despite this, Amazon has gained 6% in December following an 11% increase in November.
Amazon’s rally began in early November, supported by strong performance in the market after the U.S. presidential election and record-breaking sales during the Thanksgiving-to-Cyber Monday shopping period.
The stock remains extended beyond its 5% buy range after breaking out from a $201.20 consolidation pattern, according to MarketSurge data.
Key Metrics for Amazon Stock
- Relative Strength Rating (RS): 88 (outperforming 88% of stocks in the market).
- Composite Rating: 98 out of 99, reflecting a strong combination of earnings, sales, and price performance metrics.
Amazon Q3 2024 Earnings
Amazon reported robust third-quarter earnings on October 31, leading to a 6.2% stock rally.
- Earnings per share: $1.43, a 52% increase year-over-year.
- Revenue: $158.9 billion, up 11% year-over-year.
While the company’s fourth-quarter sales forecast was slightly below expectations, its operating income exceeded analyst predictions, showing strong profitability.
Analyst Expectations
Wall Street analysts remain optimistic about Amazon’s future:
- 95% of analysts rate Amazon as a “buy,” according to FactSet.
- The average price target is $243.33, representing about 10% upside from its current price.
- Bernstein analysts recently raised their price target to $265, naming Amazon their “top idea” for 2025.
Analysts believe Amazon is successfully defending its e-commerce market share while reigniting growth in AWS after a slowdown in 2022.
Key Trends for 2025
Generative AI will be a major focus in 2025. Amazon is positioning itself alongside other tech giants like Microsoft, Google, and Nvidia in the race to capitalize on the growing demand for AI tools and infrastructure. AWS, in particular, is expected to play a critical role in the ongoing AI revolution.
Amazon’s Market Cap and Long-Term Performance
Amazon’s market capitalization stood at $2.33 trillion as of December 31. Here’s how Amazon’s stock has performed over time:
| Time Period | Amazon Stock % Gain | S&P 500 % Gain |
|---|---|---|
| Year-to-Date (2024) | 45.7% | 23.8% |
| Past 12 Months | 45.7% | 23.8% |
| Three Years | 30.8% | 23.2% |
| Five Years | 136.7% | 82.3% |
| Since 1997 IPO | 249,966.7% | 605% |
Bottom Line
Amazon remains a leader in e-commerce, cloud computing, and the fast-growing AI space. While competition is intensifying, Wall Street analysts are bullish on the stock, expecting further gains in 2025.
Investors considering Amazon should monitor its performance at key support levels and keep an eye on broader market trends. As always, assess your investment goals before making any decisions.