Why $200 may be your final entry point

shares of Amazon.com, Inc. NASDAQ: AMZN have been happening A wonderful yearWith the stock building on a 150% rally starting in 2023. Although its shares have softened a bit in recent weeks, Tech titans It touched a fresh all-time high earlier this month. Even with this pullback, sentiment around Amazon remains strongly bullish, especially as it nears the key $200 level.

Headquartered in Seattle, Washington, Amazon boasts a market cap of $2 trillion and continues to dominate the e-commerce and cloud computing space. For those of us on the sidelines, this is a stock worth watching closely. As analysts increase targets and markets rally, Amazon’s days near $200 may be numbered.

Amazon’s basic performance

For starters, let’s look at the company Basic performance. Amazon has consistently beaten Wall Street expectations for the past two years, with its most recent earnings report in late October serving as a prime example. The company beat expectations with its latest earnings report, delivering both earnings per share and revenue prints that were well ahead of consensus.

Revenue grew by an impressive 11% year-on-year while operating income grew by an impressive 56%. This strong performance highlights Amazon’s operating strength and positions the company well for what is typically its strongest quarter of the year.

Additionally, the company continues to expand and expand its reach. Amazon Web Services (AWS) remains a key growth driver with double-digit revenue growth and expanding margins. As we head into the final two weeks of the year, these metrics indicate that Amazon is firing on all cylinders.

Bullish analyst updates bolster optimism for Amazon stock

many Analysts are enthusiastic It’s hard to ignore Amazon’s trajectory, and their overwhelming optimism. Teams at Needham & Co., Loop Capital, Morgan Stanley, and Wedbush are among more than a dozen that have reiterated their buy ratings this month alone.

of Loop Capital Price target of $275 That’s the highest on the Street, and points to an upside target of about 40% from where the stock closed on Monday, November 25. Not bad for a $2 trillion giant. Analysts have been quick to praise Amazon’s recent results, with many highlighting its improved profitability and strong cash flow as reasons to stay bullish.

Notably, no bullish rating has been priced below $200 over the past two months, reflecting widespread confidence that Amazon shares are poised to continue rallying for the foreseeable future.

Potential concerns for Amazon: rising costs and competition

While While Amazon’s outlook is overwhelmingly positive, it’s important to consider some potential risks. Increasing competition In the e-commerce space and rising costs can put pressure on margins, and For these reasons, Wells Fargo recently urged caution with an equal weight rating.

Moreover, regulatory scrutiny remains a wildcard. Reports suggest that Amazon could face an EU antitrust investigation next year, with possible fines. But again, these challenges are about par for the course for tech titans, and based on recent price action, investors don’t seem overly concerned.

Joining

From a technical perspective, it’s important to note that Amazon’s uptrend remains largely intact despite the stock falling 10% over the past fortnight. This was good as it relieved some of the pressure on Amazon’s Relative Strength Index (RSI). It is currently sitting at 53, indicating plenty of room for the stock to start moving higher again before it comes close to entering overbought territory.

Investors should look for gains going forward into the rest of the year, especially with broader market conditions working in Amazon’s favor. The S&P 500 is flirting with all-time highs, and the Fed’s recent interest rate cuts have Increasing a risk-taking feeling That should continue to benefit stocks like Amazon. Let’s take a look at how stocks traded over the Thanksgiving weekend; Based on current sentiment, don’t be surprised if it never trades below $200 again.

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