We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Time to Buy Amazon's Stock on Upbeat AI Commentary and Strong Q3 Results?
Read MoreHide Full Article
Last week Amazon (AMZN - Free Report) ) was able to join Alphabet (GOOGL - Free Report) ) in impressively surpassing third-quarter top and bottom-line expectations.
Accompanied by very positive commentary surrounding artificial intelligence (AI) being the future propeller of its AWS cloud services, Amazon’s stock has risen +10% since reporting while Alphabet’s stock is down more than -10% on concerns that its cloud segment is not receiving quite the boost from AI as Wall Street expected.
With Amazon’s stock now up +56% year to date, let’s see if it’s time to buy AMZN shares for more upside following the company's strong Q3 results.
Image Source: Zacks Investment Research
Amazon Q3 Review
Reporting its Q3 results last Thursday, Amazon’s earnings of $0.85 per share easily surpassed the Zacks Consensus of $0.58 a share by 46% with sales of $143.08 billion topping estimates by 1%.
More impressive, Q3 earnings skyrocketed 325% from $0.20 a share in the prior year quarter as the e-commerce giant continues to prioritize profitability and lower its spending with sales up 12% from a year ago.
Image Source: Zacks Investment Research
Despite monitoring expansion costs, one of the highlights of the quarter was Amazon’s Advertising Services segment which brought in $12.06 billion topping estimates by 5% and soaring 26% year over year.
Image Source: Zacks Investment Research
Furthermore, Amazon’s AWS segment sales increased 12% YoY to $23.05 billion although this slightly missed estimates of $23.18 billion.
Still, investors were delighted at CEO Andy Jassy’s commentary that AWS is innovating and delivering at a rapid clip, particularly in generative AI.
Jassy stated Amazon Bedrock (custom AI chips) is the easiest and most flexible way to build and deploy generative AI applications with its coding companion the CodeWhisperer allowing enterprises to have the equivalent of an experienced engineer.
Image Source: Zacks Investment Research
Outlook & Price Target
According to Zacks estimates, Amazon’s fiscal 2023 EPS is expected at $2.34 per share compared to $0.71 a share last year. Even better, FY24 earnings are projected to climb another 40% to $3.13 per share. On the top line, sales are forecasted to be up 11% this year and jump another 12% in FY24 to $639.89 billion.
Image Source: Zacks Investment Research
Correlating with Amazon’s attractive outlook the Average Zacks Price Target of $169.15 a share represents 32% upside in AMZN from current levels.
Image Source: Zacks Investment Research
Bottom Line
Amazon’s stock currently lands a Zacks Rank #3 (Hold) following its strong Q3 results. On top of the sharp post-earnings rally in AMZN shares, better buying opportunies may still be ahead considering recent volatility in the broader market but holding Amazon's stock could be rewarding.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Time to Buy Amazon's Stock on Upbeat AI Commentary and Strong Q3 Results?
Last week Amazon (AMZN - Free Report) ) was able to join Alphabet (GOOGL - Free Report) ) in impressively surpassing third-quarter top and bottom-line expectations.
Accompanied by very positive commentary surrounding artificial intelligence (AI) being the future propeller of its AWS cloud services, Amazon’s stock has risen +10% since reporting while Alphabet’s stock is down more than -10% on concerns that its cloud segment is not receiving quite the boost from AI as Wall Street expected.
With Amazon’s stock now up +56% year to date, let’s see if it’s time to buy AMZN shares for more upside following the company's strong Q3 results.
Image Source: Zacks Investment Research
Amazon Q3 Review
Reporting its Q3 results last Thursday, Amazon’s earnings of $0.85 per share easily surpassed the Zacks Consensus of $0.58 a share by 46% with sales of $143.08 billion topping estimates by 1%.
More impressive, Q3 earnings skyrocketed 325% from $0.20 a share in the prior year quarter as the e-commerce giant continues to prioritize profitability and lower its spending with sales up 12% from a year ago.
Image Source: Zacks Investment Research
Despite monitoring expansion costs, one of the highlights of the quarter was Amazon’s Advertising Services segment which brought in $12.06 billion topping estimates by 5% and soaring 26% year over year.
Image Source: Zacks Investment Research
Furthermore, Amazon’s AWS segment sales increased 12% YoY to $23.05 billion although this slightly missed estimates of $23.18 billion.
Still, investors were delighted at CEO Andy Jassy’s commentary that AWS is innovating and delivering at a rapid clip, particularly in generative AI.
Jassy stated Amazon Bedrock (custom AI chips) is the easiest and most flexible way to build and deploy generative AI applications with its coding companion the CodeWhisperer allowing enterprises to have the equivalent of an experienced engineer.
Image Source: Zacks Investment Research
Outlook & Price Target
According to Zacks estimates, Amazon’s fiscal 2023 EPS is expected at $2.34 per share compared to $0.71 a share last year. Even better, FY24 earnings are projected to climb another 40% to $3.13 per share. On the top line, sales are forecasted to be up 11% this year and jump another 12% in FY24 to $639.89 billion.
Image Source: Zacks Investment Research
Correlating with Amazon’s attractive outlook the Average Zacks Price Target of $169.15 a share represents 32% upside in AMZN from current levels.
Image Source: Zacks Investment Research
Bottom Line
Amazon’s stock currently lands a Zacks Rank #3 (Hold) following its strong Q3 results. On top of the sharp post-earnings rally in AMZN shares, better buying opportunies may still be ahead considering recent volatility in the broader market but holding Amazon's stock could be rewarding.