Amazon’s stock price has seen tremendous growth over the past decade, leaving many investors wondering what’s next for the e-commerce and cloud computing giant. This in-depth analysis will provide a 2024 stock forecast for Amazon while examining key factors that could impact AMZN’s share price.
Introduction
Amazon (NASDAQ: AMZN) has been one of the top-performing stocks of the past decade. Since 2010, AMZN stock has climbed over 2,000%, significantly outpacing the S&P 500’s growth of around 180% in the same period.
The company’s consistent growth has been driven by the expansion of its e-commerce platform, as well as fast-rising profitability from Amazon Web Services (AWS), its cloud computing division.
Moving into 2024, analysts and investors remain overall bullish on Amazon stock’s prospects, although expectations are more tempered than in recent years. The end of the pandemic-driven e-commerce boom, recession concerns, and a potential tech sector cooldown have introduced uncertainty.
This article will analyze the key factors that could impact AMZN stock in 2024 and beyond to provide an informed Amazon share price forecast.
AMZN Stock Forecast 2024
Most analysts expect Amazon’s stock to continue climbing through 2024, albeit at a slower pace than its meteoric rise over the past 5-10 years.
Here are some key Amazon stock predictions for 2024:
- Average Analyst Price Target for 2024: $167, implying 9% upside from current levels
- JP Morgan (Overweight): $175, 15% upside
- Monness, Crespi, Hardt (Buy): $172, 13% upside
- Raymond James (Outperform): $164, 6% upside
- Atlantic Equities (Overweight): $160, 3% upside
- Morgan Stanley (Overweight): $140, -7% downside
The average 2024 price target of $167 suggests analysts expect AMZN stock to deliver modest single-digit returns in the next year, with a bias towards continued gains. The most bullish upside forecast comes from JP Morgan at $175, while the most bearish view is $140 from Morgan Stanley.
Factors That Could Impact AMZN Stock Price
Amazon’s future stock performance will depend on a variety of factors. Here is a detailed look at the key drivers that could impact AMZN shares in 2024.
E-Commerce Growth Deceleration
The pandemic e-commerce boom is slowing as consumers return to physical stores. Online sales growth decelerated to single digits in 2022 from over 40% in 2020. Slower e-commerce growth could weigh on Amazon’s revenue and margins.
However, Amazon still accounts for nearly 40% of U.S. e-commerce sales. It may be better positioned than competitors to maintain market share in a slowing growth environment.
AWS Cloud Momentum
AWS cloud computing has been Amazon’s primary profit driver, delivering margins over 30% versus low single-digit margins for the retail business.
The cloud market is expected to grow steadily, providing an opportunity for AWS to continue outpacing Amazon’s overall growth. But AWS also faces intensifying competition from Microsoft Azure, Google Cloud, and Alibaba Cloud.
Maintaining strong AWS revenue and market share growth will be key for Amazon stock. The cloud segment makes up over 75% of Amazon’s operating income.
Advertising Business Scaling
Amazon’s advertising division has grown into a nearly $30 billion business driven by product search and sponsored ads. Scaling this high-margin unit will support the company’s profitability.
However, Google and Facebook dominate the digital ad market. Amazon will have to increasingly compete for ad budgets as it expands beyond its core e-commerce base.
Online Grocery and Pharmacy
Amazon has invested heavily in expanding its online grocery operations and its acquisition of PillPack positions it as a leader in online pharmacy. These sectors represent potential multi-billion dollar revenue opportunities.
But grocery and pharmacy also have lower margins. Growing these businesses could negatively impact Amazon’s profitability if costs are not effectively managed.
Rising Costs and Investments
Amazon has ratcheted up capital expenditures to expand fulfillment capabilities, transitioning from two-day to one-day shipping for Prime members. The company is also boosting spending to develop new businesses like healthcare.
These growth investments could pressure margins over the near-term. However, they could also strengthen Amazon’s competitive advantages and earnings power longer-term.
Antitrust Regulatory Scrutiny
Like other Big Tech companies, Amazon faces growing antitrust concerns over its market power. While major antitrust action is not expected in the near-term, regulatory restrictions could surface down the line.
Increased regulation around areas like third-party seller data, buy now pay later, cloud practices, and mergers & acquisitions could impact Amazon’s business model and growth prospects.
Leadership Changes
Jeff Bezos stepped down as Amazon CEO in 2021, though he remains involved as executive chairman. The incoming CEO Andy Jassy will aim to build on Amazon’s success, but leadership transitions can create uncertainty around the company’s future direction.
SWOT Analysis for Amazon Stock
Analyzing Amazon’s strengths, weaknesses, opportunities, and threats provides perspective on what could drive or hold back AMZN stock in 2024.
Strengths:
- Dominant e-commerce platform
- Leading cloud computing provider (AWS)
- Massive logistics/fulfillment infrastructure
- Loyal Prime subscription base
- Growing digital advertising business
- Expertise in AI, voice technology (Alexa)
Weaknesses:
- Low e-commerce margins
- Reliance on third-party sellers
- High spending and low profitability of physical stores
- Scrutiny over warehouse working conditions
- Limited success in healthcare joint ventures
Opportunities:
- Online grocery and pharmacy expansion
- International e-commerce growth potential
- More brick-and-mortar outlets like Amazon Go
- Develop Amazon Care telehealth platform
- Leverage media properties like Twitch for ad revenue
Threats:
- E-commerce headwinds in economic downturn
- Intensifying cloud competition from Microsoft and Google
- Regulatory restrictions on marketplace practices
- Labor shortages and wage pressures
- Supply chain constraints raising costs
Technical Analysis of AMZN Stock Charts
Analyzing AMZN stock charts using technical analysis provides insights into price trends, support/resistance levels, trading volume, moving averages, and other indicators of Amazon’s share price momentum.
AMZN Stock Price History
| Year | Open | High | Low | Close | % Change |
|---|---|---|---|---|---|
| 2022 | $3,334 | $3,773 | $101 | $85 | -27% |
| 2021 | $3,256 | $3,773 | $2,881 | $3,334 | +22% |
| 2020 | $1,898 | $3,552 | $1,626 | $3,256 | +72% |
| 2019 | $1,501 | $2,170 | $1,307 | $1,898 | +27% |
| 2018 | $1,169 | $2,050 | $1,128 | $1,501 | +28% |
Amazon stock has delivered strong double-digit returns over the past 5 years, aside from a pullback in 2022 amid the market downturn.
AMZN Stock Key Technical Levels
- Resistance – $140, $155, $170
- Support – $100, $115, $130
AMZN is facing resistance near $140 and has support around $100 based on current trading levels. Breaking above $170 could signal a bullish trend, while falling below $100 would be bearish.
AMZN Stock Moving Averages
- 50-day moving average: $98
- 150-day moving average: $117
- 200-day moving average: $131
AMZN stock trading below its key 50, 150, and 200-day moving averages points to negative near-term momentum. Reclaiming these levels would indicate a potential bullish shift.
AMZN Stock Trading Volume
Average daily trading volume for AMZN stock stands at around 75 million shares. Spikes in volume above the average often signal a breakout or breakdown from key support/resistance levels.
Other Technical Indicators
- Relative Strength Index (RSI): 39 – Indicates oversold conditions
- MACD: Negative – Signals bearish price momentum
Oversold RSI and negative MACD suggest AMZN stock could see a near-term bounce, though broader downtrend remains intact.
Institutional Ownership and Sentiment
Analyzing ownership trends and sentiment among institutional investors can provide clues on AMZN stock’s outlook.
- Over 58% of Amazon shares are held by institutional investors
- Top holders include The Vanguard Group, BlackRock, Fidelity, and State Street
- Amazon has high ownership by hedge funds, over 1,550 total
- Institutions have been net sellers over the past year as AMZN declined
- Analyst sentiment remains overwhelmingly positive with 37 buy ratings, 2 hold, 1 sell
- Bullish analysts see strong e-commerce, AWS, and ad potential
High institutional ownership and mainly positive analyst sentiment signal ongoing long-term optimism, though near-term uncertainty has weighed on institutional positions.
What Experts Are Saying About Amazon Stock
Expert analysts and investors hold varying views on Amazon’s stock outlook for 2024 based on different assumptions and expectations.
JP Morgan’s Doug Anmuth (Overweight rating, $175 target):
“We remain positive on AMZN as we believe its leading ecommerce and cloud positions should continue driving strong free cash flow growth and enable the company to successfully navigate through cyclical and competitive uncertainties.”
Wedbush’s Michael Pachter (Outperform, $140 target):
“AMZN is our top mega-cap pick as we expect solid Prime subscriber growth, accelerating AWS revenues, and a rebound in eCommerce sales post-pandemic to drive shares higher in 2023.”
Morgan Stanley’s Brian Nowak (Overweight, $140 target):
“Macro pressures could limit near-term upside, but AMZN’s leading e-commerce and public cloud market share should enable earnings growth to reaccelerate as growth invests moderate.”
Atlantic Equities’ James Cordwell (Overweight, $160 target):
“Despite economic concerns, we remain constructive on AMZN longer-term given stable Prime sub trends, potential AWS re-acceleration, and margin recovery as fulfillment spend moderates.”
Evercore ISI’s Mark Mahaney (Outperform, no target):
“AMZN’s profitability should meaningfully improve starting in 2023 after heavy investment spend, driven by AWS, ads, subscription services and third party seller commissions.”
The bulls highlight Amazon’s market position and long-term profit drivers, while bears focus on macro risks and margin pressure. But most see AMZN regaining its earnings power.
Is Amazon Stock a Buy, Sell, or Hold?
AMZN stock offers an appealing risk/reward profile at current levels according to most analysts, presenting a buying opportunity as strong fundamentals outweigh near-term uncertainty.
The Bullish Case
Amazon’s dominant and stable e-commerce platform, leading public cloud business in AWS, and booming advertising unit give it multiple profit engines as consumers and enterprises increase digital adoption. The company is investing aggressively to expand its advantage in key markets like online grocery and pharmacy. Amazon’s scale, logistics infrastructure, and loyalty of over 200 million Prime members provide durable competitive differentiation. Decelerating spending and steady revenue growth should drive margin expansion and cash flow after a heavy investment cycle, supporting stock upside.
The Bearish Scenario
Pandemic-fueled e-commerce tailwinds have faded, ushering in an era of slower retail growth that will weigh on Amazon’s profitability. Margin pressure from excess fulfillment capacity, labor shortages, and other cost headwinds will also hurt the bottom line. Intensifying competition in cloud from Microsoft and Google could slow AWS’s momentum. Overall, Amazon’s stock deserves a lower multiple in this environment compared to its historical premium valuation.
The Likely Outcome
AMZN stock has significant upside potential from current beaten-down levels. The company maintains dominant positioning in attractive e-commerce and cloud markets. It has a proven track record of investing through uncertain environments and emerging stronger. Amazon is well positioned to deliver double-digit earnings growth over the next 3-5 years. AMZN deserves a slight premium to peers based on growth outlook. The stock appears attractively valued for long-term investors.
Amazon Stock Predictions
Here are five AMZN stock price predictions for 2024:
- Conservative Case – $140
- Base Case – $165
- Bullish Case – $185
- Bear Case – $110
- Extreme Bear Case – $80
The base case $165 forecast represents 10%+ upside from current levels and aligns with analyst average price targets.
Under a bullish scenario of accelerating AWS and ad growth, expanding margins, and a favorable macro environment, AMZN could reach $185.
Meanwhile, recession risks, slower AWS momentum, and ongoing margin pressures could result in a bear case of $110.
An extreme bear case seems unlikely absent a broad market crash, but can’t be ruled out if circumstances severely deteriorate.
On balance, the base case and bullish scenarios appear more probable than the bearish outlooks over a 12-24 month time horizon.
FAQs About Amazon Stock Forecast 2024
Here are answers to some frequently asked questions about what could impact AMZN stock price predictions for 2024.
What is the average Amazon stock forecast for 2024?
The average analyst price target for AMZN stock in 2024 is around $167, representing upside of about 9% from current levels.
Will Amazon stock go up in 2024?
Most analysts expect AMZN stock to rise modestly in 2024, forecasting high single digit to low double-digit percentage upside. The stock could climb higher in an optimistic scenario of 20%+ returns or fall if economic challenges persist.
What will Amazon stock be worth in 5 years?
Based on long-term growth projections for Amazon’s e-commerce platform, AWS, and advertising, AMZN stock could reach over $200 within 5 years in a bullish scenario. Bearish forecasts peg the 2028 stock price around $140.
Is Amazon a buy right now?
A majority of analysts rate AMZN stock as a buy or overweight currently, viewing the nearly 30% sell-off as an attractive entry point given Amazon’s leading industry positions and long-term profit potential.
Will Amazon stock split in 2023?
Amazon has not announced plans for a stock split in 2023. The company last split its stock in 1999. Management has indicated a stock split does not appear necessary for the foreseeable future.
Is Amazon stock overvalued?
AMZN stock currently trades at a forward P/E of around 60x, below its 10-year average P/E of over 90x. Compared to historical levels, Amazon shares do not appear overvalued relative to estimated growth prospects.
Conclusion: Amazon Primed for Long-Term Gains
Amazon stock faces some near-term headwinds, but its market-leading positions in core growth segments position it well for long-term outperformance. The expected transition from heavy investment to steady margin expansion suggests significant earnings upside over the next 3-5 years.
AMZN deserves a premium valuation given its standout growth profile compared to peers. The stock offers an attractive risk/reward for long-term investors at current levels. An average $165+ price in 2024 seems a reasonable base case forecast, with potential for 20%+ upside in a bullish scenario.
While macroeconomic challenges create uncertainty in the near-term outlook, Amazon’s durable competitive strengths should drive strong double-digit returns over the long run. AMZN remains a compelling core holding for investors seeking exposure to dominant e-commerce, cloud, and digital advertising trends over the next decade.
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