Amazon (AMZN) traded 6% higher on Friday morning, after an earnings report that beat Wall Street estimates. The company reported earnings per share of $3.27 and total revenue of $51 billion, compared to analyst expectations of $1.26 and $50 billion. As well, they provided Q2 guidance of $51-54 billion in revenue, compared to expectations of $52 billion.
How did Amazon more than double Wall Street’s expectations for profits? This was largely driven not by ecommerce but rather by its cloud services division, Amazon Web Services, which accounted for 73% of operating income and grew at a rate of 57%.
We have analyzed AMZN on the basis of it market cycles, which are represented by the cycle brackets at the bottom of the chart. Our work showed the stock in a “yellow” corrective phase, which represented some of the uncertainty inherent in earnings. The bottom line is that into late May, we expect the declining phase of its current market cycle will help to push the price into the $1500 area.
Amazon (AMZN) Stock Chart with Weekly Bars
For an introduction to cycle analysis, check out our Stock Market Cycles video, or watch the askSlim Market Week show every Friday on our YouTube channel.
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