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Amazon: $20B+ Cost Cuts, $186 Stock Hurdle

Amazon (Nasdaq: AMZN) might reduce its costs dramatically by deploying autonomous electric vehicles (EVs) for middle- and last-mile deliveries, reports JMP Securities. This development could significantly impact the Amazon stock outlook. The investment firm approximates that these technological improvements could save the e-commerce giant more than $20 billion per year.

Right now, fuel expenses make up 25-30% of per-mile expenses in delivery operations. However, with EVs, energy costs could decrease by nearly 50%. Furthermore, driver wages and benefits- the biggest part of per-mile costs, exceeding 40%- could be diminished automatically.

Amazon estimates replacing self-driving trucks with autonomous electric vans could cut global shipping costs by 20%. This change could save the company up to $1.15 per mile. In the near term, JMP expects up to $7 billion in OCR savings. This projection is based on integrating electric Rivian vans into Amazon’s last-mile fleet.

In line with these cost-reduction measures, investors may retain some hesitancy in the face of volatile market conditions. Given the high stock valuations in 2024, many investors are cautious about taking on unnecessary risk. However, sectors focused on innovations like autonomous EV technology may still offer potential growth opportunities.

Amazon Stock Chart Analysis

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AMZN/USD Chart

Observing the 15-minute chart of Amazon, the stock has been traded within a quite narrow range in the past two days. After the steep fall on September 29, the AMZN shares found the support level very close to $181, as well as through around the $182 level after that, thereby some sort of temporary stability. Traders have made several efforts to push the stock up, yet it remains confined within the $182 and $186 range.

We saw a tremendous rise in the volume of trading in the first week of October that briefly propelled the stock to more than $185, but it was a short-lived effect. The stock price soon faced a backlash and went back to the $182-$183 range after October 3. It appears that the pressure to sell is becoming stronger at such higher points, which makes it harder for AMZN stock to hold profits over $185.

The stock is currently around $181.94, up by 0.07% in the previous session. We are noticing that the $181 level is the cause of short-term support, and when the volume dwindles, buyers might be afraid to take it further. The Amazon stock outlook hinges on whether AMZN can break out above $186 with strong support, or if a drop below $181 will trigger more selling pressure.

It would serve as an opportunity for short-term traders to purchase and profit from the upward breakout. Keep an eye on these breakthrough levels while we proceed!

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