For many technology companies, the road back to new highs has been a long one: Several of the Magnificent Seven stocks have already surpassed their previous highs, and one of them recently rose in tandem with the broader Nasdaq Composite Index.
Amazon, one of the world's largest e-commerce companies, maintains a strong position in the online retail market thanks to its Prime membership, which offers lightning-fast shipping services. The company has diversified into many other categories and is now a leading provider of cloud infrastructure-as-a-service for enterprise customers offering Amazon Web Services (AWS) services.
Expanding global presence and increasing capabilities in areas such as generative AI, healthcare, grocery stores, and self-driving cars will be major tailwinds for Amazon going forward.
Zacks Overview
Amazon(AMZN – Free Report) currently has a Zacks Rank #3 (Hold) and is benefiting from fundamental momentum in both the Retail and Technology industries. The stock is showing relative strength as buying pressure builds on the market leader.
The company is a member of the Zacks Internet – Commerce industry group and currently ranks in the top 36% of over 250 Zacks Ranked industries. Ranked in the top half of all Zacks-ranked industries, this group is expected to outperform the market over the next three to six months. This group has significantly outperformed the market over the past year.
Past research studies show that about half of stock price increases are due to industry grouping. In fact, the top 50% of the Zacks Rank Industries outperform the bottom 50% by a multiple of more than 2-to-1.
Also note the favorable features of this industry below.
It's no secret that investing in stocks that belong to major industry groups can give you an edge over the market. By focusing on the leading stocks within the top 50% of the Zacks Rank Industries, you can dramatically improve your stock selection success rate.
Recent results and future outlook
Amazon's financial strength is undeniable, and its first quarter performance was driven by Prime and AWS. In early May, the tech giant posted adjusted first-quarter earnings of $1.13 per share, a 264% increase from the same period last year. The figure surpassed the Zacks Consensus Estimate by 36.1%.
Net revenue for the quarter was $143.31 billion, an increase of 13% year over year. Growing momentum in AWS, increased investment in generative AI, and strength in our advertising business contributed to the strong performance.
Amazon has delivered an average earnings surprise of 48.2% over the past four quarters, beating expectations in all of them. For the current quarter (Q2), analysts have raised their EPS estimates by 10.87% over the past 60 days. The Zacks Consensus Estimate for the second quarter is currently $1.02 per share, representing an improvement of about 62% from the year-ago period. Revenue is projected to increase 10.6% to $148.59 billion.
AMZN stock reacted well and hit a new all-time high. The stock has already risen more than 22% this year.
Will Amazon start paying a dividend soon?
Tech giant Amazon stands alone as a giant among its peers, steadfastly refusing to pay dividends to its shareholders. But there are many whispers that changes to Amazon's dividend policy may be imminent, as its contemporaries bow to shareholder pressure.
Amid a series of moves to give shareholder benefits, tech giants have lost out to the lure of dividends. A meta platform parented by Facebook (meta – Free Report) and Google's parent company Alphabet (Google – Free Report) has led this trend, increasing returns for investors through quarterly dividends and an enhanced stock repurchase program.
apple (AAPL – (Free Report) The recent announcement of a dividend increase alongside a monumental share buyback program further highlights this shift. These initiatives act as a powerful sweetener for investors, especially against the backdrop of capital-intensive AI initiatives and signs of slowing growth in certain business segments.
Amid this shareholder frenzy, Amazon has so far been an enigma, resisting the temptation to get into the dividend fray. But that resilience is not without merit. Fueled by a thriving enterprise cloud operation, the company continues to scale unprecedented heights. AWS remains a significant revenue driver, with revenue on track to break his $100 billion mark this year, driven by surging demand for generative AI services and cloud migration trends.
Despite the recent news that former AWS CEO Adam Selipsky has stepped down, the division remains in good shape with long-time insider Matt Garman taking over the role. There is.
conclusion
Amazon is poised for sustained growth and market domination, backed by a robust suite of services, continuous innovation, and rapidly growing global footprint.
AMZN stock's new high is a sign of strength. The company's performance is supported by a trend of positive revisions to earnings forecasts.
Keep an eye on Amazon, as the tech giant looks poised to continue outperforming.
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