Amazon.com is breaking records: is its share price ready for another leap?

Amazon.com, Inc. (NASDAQ: AMZN) continues to increase its revenue and strengthen its market position. The share price reflects this trend, reaching another historical maximum in November. According to the company’s forecasts, the holiday season will deliver record revenue. Will its share price achieve a new historical maximum in December and continue to grow in 2025?

This article discusses Amazon.com, Inc., offering a fundamental analysis of Amazon’s (AMZN) stock and a technical analysis of Amazon.com shares. These form the basis for the AMZN stock price forecast for December 2024 and the entire 2025. The article also examines the company’s business model and market position, assesses the risks of investing in Amazon.com, and presents expert forecasts for Amazon’s shares.

About Amazon.com, Inc.

Amazon.com, Inc. is one of the world’s largest technology companies. It was established by Jeffrey Bezos in 1994 in Seattle, US. Initially, the company specialised in selling books online but has since evolved into a multi-industry platform. Today, Amazon is engaged in e-commerce, provides cloud computing services through Amazon Web Services (AWS), manufactures electronics (such as Kindle and Echo), and develops media services, including streaming and content production. The company held its IPO on 15 May 1997, listing its shares on the NASDAQ under the ticker AMZN.

Amazon.com, Inc.’s current market position

As of 2024, Amazon remains a global leader in electronic technologies and commerce. The company holds the largest share of online sales in the US market – approximately 37.6%, significantly outpacing competitors such as Apple and Walmart.

Amazon Web Services (AWS) continues to be a key growth driver, contributing significantly to revenue due to the increasing popularity of cloud solutions and artificial intelligence (AI). This segment is expected to play an even more crucial role amid ongoing digital transformation and rising demand for cloud technologies. Globally, Amazon maintains a strong position, offering goods and services in over 100 countries and regions while serving as a benchmark for innovation and quality customer service.

Strong financial results, a significant influence on the global economy, and the continuous implementation of innovative technologies secure Amazon’s dominant market position.

Amazon.com, Inc.’s main financial flows

Amazon’s revenue is based on several key segments, reflecting the company’s varied, multisectoral operations:

• Online retail: selling goods directly on behalf of the company, including books, electronics, clothing, household appliances, and more
• Marketplace: providing the company’s platform to third-party sellers to sell their goods through its website. Amazon generates revenue from sales commissions, paid storage and delivery services and other seller support services
• Cloud computing (Amazon Web Services): this is the world’s largest cloud service provider. The service includes server rentals, data storage, big data analytics tools, and other cloud solutions. This segment generates Amazon’s highest profits compared to all other business areas
• Subscriptions (Amazon Prime and other services): providing access to streaming platforms (video and music), cloud storage, and other products. This category also includes revenue from subscriptions to other services, such as Kindle Unlimited and Amazon Music Unlimited
• Advertising: actively developing its digital advertising business, including income from placing advertisements on the platform, such as ads in search results. Revenue from these and other advertising services has increased significantly in recent years
• Offline retail stores: physical sales outlets, including Amazon Go and Amazon Fresh stores, Whole Foods Market supermarkets, and speciality book and electronics stores
• Electronics and technology sales: producing and selling its own products, including the popular Kindle eBooks, Echo smart speakers with Alexa voice assistant, Fire TV streaming boxes, and other technology products
• Other areas: less significant revenue streams, such as providing logistics services to third parties, acting as an intermediary in book publishing (Amazon Publishing), developing video games (Amazon Game Studios), income from the Twitch streaming platform, and other innovative projects

These diverse revenue streams enable Amazon.com, Inc. to remain resilient to changing market conditions and expand its influence across various sectors.

Key developments for Q3 2024

Amazon does not rest on its laurels, striving to strengthen its market position each quarter. The main Q3 2024 developments are listed below:

• Broadened its range of brands: new additions include AllSaints, Beats x Kim, Estée Lauder, Kate Spade New York, and others
• Accelerated drug delivery times: the company announced its plans to reduce delivery times for medicines from Amazon pharmacies, aiming for same-day delivery
• Introduced new generative AI features: Amazon unveiled AI-powered tools, including AI Shopping Guides (product search), Project Amelia (assistant for sellers), Rufus (shopping assistant), and apps for creating videos and live photos for advertisers
• Launched Oracle Database@AWS: this service enables redistributing workloads from Oracle to the dedicated AWS infrastructure
• Signed contracts with major corporations: Amazon entered partnerships with companies such as Australia and New Zealand Banking Group Limited, Booking.com, Capital One Financial Corporation (NYSE: COF), Datadog, Inc. (NASDAQ: DDOG), Epic Games, Fast Retailing, Itaú Unibanco, Luma AI, National Australia Bank, Sony Group Corporation (NYSE: SONY), T-Mobile US, Inc. (NYSE: TMUS), Toyota Motor Corporation (NYSE: TM), and Veeva Systems Inc. (NYSE: VEEV)
• Launched the second season of the Lord of the Rings: the series garnered positive reviews from viewers and critics, becoming the most popular season on Prime Video by hours watched
• Announced plans to recruit personnel: the company plans to hire 250,000 employees across the US during the holiday season
• Signed a partnership with e& (previously known as Etisalat): in October 2024, Amazon Web Services entered into a strategic partnership with e&, a leading global technology group headquartered in the UAE. The partnership, valued at over 1 billion USD, aims to accelerate cloud technology innovations and drive digital transformation in the Middle East. This initiative forms part of AWS’s broader strategy to expand its presence in the region and support the UAE’s growing digital economy
• Expanded collaboration with Siemens: on 24 September, Siemens and Amazon strengthened their partnership to advance generative AI technologies across industries. The agreement ensures the integration of Amazon Bedrock with Siemens’ Mendix low-code platform, enabling companies to easily implement AI models, improving system performance even for users without advanced programming skills
• Established a business partnership with CelcomDigi: on 29 October, AWS signed an agreement with CelcomDigi, Malaysia’s largest telecommunications company. Under the agreement, CelcomDigi will develop an AI Sandbox using Amazon Bedrock, a platform for building AI apps. Additionally, CelcomDigi plans to create algorithms for the Bahasa Melayu language using Amazon Titan and Anthropic Claude models, improving customer interactions in the local language

It is worth noting that clients trust the company’s products and actively seek partnerships with Amazon under mutually beneficial terms. Such collaborations help strengthen Amazon’s market position and could positively affect its revenue in the future.

Amazon.com, Inc.’s Q4 2024 report

Amazon ended Q3 2024 with gains in key financial indicators. Below is the main report data:

• Revenue: 158.9 billion USD (+11%)
• Net income: 15.3 billion USD (+54%)
• Earnings per share: 1.43 USD (+52%)
• Operating profit: 17.5 billion USD (+55%)

Revenue by segment:

• North America: 95.5 billion USD (+8%)
• Operating income (loss): 5.7 billion USD (+30%)
• International: 35.9 billion USD (+11%)
• Operating income (loss): 1.3 billion USD – in Q3 2023, the company posted a loss of 95 million USD
• Amazon Web Services (AWS): 27.4 billion USD (+11%)
• Operating income (loss): 10.4 billion USD (+49%)

All key financial indicators of the company recorded growth in Q3 2024. The international segment saw sales growth, but costs also rose concurrently. As a result, it is still the most vulnerable and would be the first to incur losses in case of even slight economic disruptions.

The North American segment contributes the most to the company’s total revenue but is also characterised by the highest costs.

The AWS service remains Amazon’s most promising and profitable division, showing sustained growth and strong profitability.

Amazon forecasts revenue of 181 to 188 billion USD in Q4 2024, a 7-11% increase compared to the corresponding period in 2023. Operating profit is expected to range between 16 and 20 billion USD, compared to 13 billion USD a year earlier.

Expert forecasts for Amazon.com, Inc.’s shares for 2025

• Barchart: 45 out of 49 analysts rated Amazon stock as ‘Strong Buy’, three as ‘Moderate Buy’, and one as ‘Hold’, with an average price target of 236.75 USD
• MarketBeat: 42 out of 44 specialists assigned a ‘Buy’ rating to the shares, while two gave a ‘Hold’ recommendation, with an average price target of 236.20 USD
• TipRanks: 45 out of 46 professionals recommended the stock as a ‘Buy’, while one gave a ‘Hold’ rating, with an average price target of 239.00 USD
• Stock Analysis: 24 out of 42 experts rated the stock as ‘Strong Buy’, 17 as ‘Buy’, and one as ‘Hold’, with an average price target of 236.32 USD

Amazon.com, Inc.’s stock price forecast for December 2024

Amazon stock is trading within an ascending channel on the daily timeframe and has approached its upper boundary, indicating a high likelihood of a correction. Based on Amazon’s stock performance, two potential scenarios arise:

The optimistic Amazon stock forecast suggests the price testing the 191 USD support level, rebounding, and advancing to the resistance at its all-time high of 216 USD. If this level is breached, the stock price could climb to 240 USD.

The pessimistic Amazon stock forecast foresees a break below the 191 USD support level, potentially triggering a deeper price decline within the correction, reaching as low as 145 USD. Growth may then resume from this level.

Amazon.com, Inc.’s stock price forecast for 2025

On the monthly timeframe, the outlook does not favour further price growth. Divergence on the MACD indicator suggests that, in the worst-case scenario, the stock price may drop to 100 USD. This divergence has been forming since 2022, and it is difficult to predict when it will end and the primary downward phase will begin. Therefore, the potential for further price growth remains. Based on the current Amazon stock performance on this timeframe, two future scenarios are considered:

The optimistic Amazon stock forecast suggests a rebound from the 191 USD support level, followed by growth to 240 USD. A gradual ascent towards this level could neutralise (resolve) the divergence, enabling the stock price to continue its upward trajectory.

The negative Amazon stock forecast assumes a breakout below the 191 USD support level, signalling a decline within the MACD divergence. The conservative target for this decline would be the 145 USD support level. A rebound from this level could initiate a new uptrend. If Amazon’s business performance deteriorates, the next decline target would be the 100 USD support level.

Risks of investing in Amazon.com, Inc. stock

Investing in Amazon stock should be weighed against factors that may adversely affect the company’s revenue. The key risks are listed below:

• Slower e-commerce growth: this area is the company’s primary revenue stream, and if growth rates decline (for example, due to market saturation or changes in consumer preferences), it could adversely affect Amazon’s financial position
• Competition: intensifying competition from other major market players, including Shopify Inc. (NYSE: SHOP), Target Corporation (NYSE: TGT), and Walmart Inc. (NYSE: WMT). To maintain its market share, Amazon must make significant efforts to counter international competitors’ platforms, such as products from Alibaba Group Holding Limited (NYSE: BABA)
• Rising inflation: if inflation in the US begins to rise again, Amazon will face higher costs for logistics, product delivery, storage, and wages, which may reduce its operating profit
• Regulatory risks: increased scrutiny from antitrust authorities and the introduction of new regulations (for example, in taxation and data privacy) could significantly impact the business. Companies like Apple Inc. (NASDAQ: AAPL) and Alphabet Inc. (NASDAQ: GOOG) have already experienced regulatory pressure
• Weakening demand for AWS: Amazon’s most profitable segment is the AWS division. If corporate clients reduce their spending on cloud services (e.g., during an economic downturn), it could substantially affect Amazon’s net profit

Summary

Amazon.com, Inc. can be classified as a distinctive company that has proven resilient in overcoming economic turmoil. The 2020 crisis did not adversely affect the company’s revenues and even boosted its net income, which has since reached a record high. Amazon typically sees its highest revenue in Q4 of the year, and there is no reason to believe this tradition will break now. However, technical analysis suggests that Amazon’s shares are currently overbought, and a corrective decline is necessary to make the stock more attractive to investors.

In this scenario, Amazon’s stock will likely maintain its upward momentum amid the New Year’s Eve rally and continue rising. However, after the New Year, some investors are most likely to begin locking in profits, leading to a corrective decline in the stock price.