Amazon's recent quarterly earnings have catapulted its stock to near 52-week highs, thanks to standout performances in cloud computing and advertising sectors.

Amazon’s stock (AMZN) soared to new heights after the e-commerce giant reported stellar quarterly earnings that exceeded Wall Street expectations. Driven by robust cloud computing and advertising performances, Amazon delivered strong financial results despite facing economic headwinds.

The company’s cost-cutting measures, including significant layoffs and scaling back on unproven ventures, also contributed to its impressive bottom line. Amazon’s positive outlook for the first quarter of 2024, projecting sales growth of up to 13%, further fueled investor optimism. The stock price saw a notable gain after the results and is close to its 52-week high.

Amazon’s diversified revenue streams, including its rapidly growing advertising and cloud computing businesses, position it for continued growth and profitability. Analysts are bullish on Amazon’s long-term prospects, projecting that its annual revenue could reach around $1 trillion by 2028, with advertising and AWS playing a significant role.

Amazon Surges to Near 52-Week High After Blockbuster Quarterly Earnings

Amazon’s stock has surged since its latest quarterly earnings report, with the share price shooting up to $174.42 after the earnings were released.

The company’s cloud computing division, Amazon Web Services (AWS), reported revenue of $24.2 billion, meeting analysts’ expectations of $24.2 billion. Meanwhile, Amazon’s advertising segment generated $14.7 billion in revenue, surpassing analysts’ estimates of $14.2 billion.

Despite facing economic headwinds, Amazon delivered strong financial results, exceeding Wall Street’s expectations for both earnings and revenue. The tech giant reported net income of $10.6 billion, or $1.00 per share, a significant improvement from the $278 million, or 3 cents per share, it reported a year earlier. This positive performance can be attributed to CEO Andy Jassy’s cost-cutting measures, which included laying off 27,000 employees between late 2022 and mid-2023 and scaling back on some unproven ventures.

Amazon provided a positive outlook for the first quarter of 2024, projecting sales between $138 billion and $143.5 billion, representing 8% to 13% growth. This guidance surpassed analysts’ expectations of $142.1 billion.

Currently trading at $171.81, the stock is near its 52-week high of $172.5. However, given the business’s fundamentals, analysts are optimistic that the tech giant will continue to grow.

Amazon Expected to Make $67B in Ad Revenue by 2025

Amazon, the world’s leading e-commerce player by revenue and the fourth-largest company by market cap, is a prime example of an organization whose business model is evolving. Advertising is now a major profit center alongside its e-commerce operations.

In the last quarter of the previous year, Amazon generated $14.6 billion in ad revenue, a 19% increase year over year. Advertising contributes to a significant portion of Amazon’s revenue and is expected to grow, with projections of $67.6 billion in ad revenue by 2025.

Cloud computing is another major growth area for Amazon, with Amazon Web Services (AWS) accounting for two-thirds of Amazon’s operating income. The global cloud computing market is expected to grow from under $700 billion to more than $1.4 trillion by 2029.

Analysts predict Amazon’s annual revenue could reach around $1 trillion by 2028, with significant contributions from both e-commerce and advertising. AWS revenue is projected to potentially reach around $200 billion by 2028. Analysts forecast Amazon’s per-share earnings to increase to $9.25 in 2028 from $2.90 in 2023. Profit growth is expected to outpace sales growth due to the higher margins of cloud computing and advertising.

Amazon stock is speculated to possibly reach around $400 apiece by 2028, based on current valuations.

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