Is Amazon Stock A Buy After Late 2024 Rally?

2 weeks ago 19

Amazon (AMZN) stock had an up-and-down 2024 but is on pace to close with a strong final three months. Amazon stock is ahead 48% so far this year, with the e-commerce and cloud computing company posting a 20% rally since the start of October.

The rally has been powered by investor optimism about both Amazon's e-commerce and cloud-computing operations. Still, there are ongoing investor debates as Amazon seeks to build on its gains. Analysts are scrutinizing the position of the Amazon Web Services' cloud business in the battle for enterprise artificial intelligence spending against Microsoft (MSFT). Meanwhile, Amazon's e-commerce dominance is facing challenges from Walmart (WMT) and China-based upstarts such as Temu and Shein.

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So is Amazon stock a buy? Here's what to know about recent stock action and news for the tech giant:

Amazon Stock Bounces From 21-Day Line

Amazon stock opened on the stock market Tuesday a fraction higher at 225.61 on what will be a shortened trading day for Christmas Eve. The stock has found support near Amazon's 21-day trading average after dropping nearly 5% in a broader market pullback on Dec. 18.

That leaves Amazon stock not far below a 233 record high reached on Dec. 16. The stock has gained 8% so far this month after an 11% gain in November.

The rally for Amazon kicked off early last month, when stocks jumped following the election of President Donald Trump to a second term.

Amazon broke out above a 201.20 consolidation pattern, according to MarketSurge.

Since that time, Amazon hosted its AWS re:Invent conference, where it clearly stepped up its challenge to Nvidia's (NVDA) dominance of the AI chip market. The company also said the five-day shopping window between Thanksgiving and Cyber Monday brought record spending.

Amazon stock is now above a 5% buy zone from the consolidation pattern entry, according to MarketSurge. But MarketSurge has also identified a three-week-tight pattern on Amazon's weekly chart with a potential entry at 233.

Investors, however, also will want to check out IBD's Big Picture column for the current market direction before considering any buy points. Here is a guide to understanding IBD's rating system.

Meanwhile, Amazon's Relative Strength Rating sits at 88 out a best-possible 99. That means Amazon has outperformed 88% of stocks in the IBD database over the past 12 months. IBD recommends focusing on stocks with at least an 80 RS Rating.

The IBD Stock Checkup tool shows Amazon stock holds an IBD Composite Rating of 98 out of a best-possible 99. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.

Amazon Q3 2024 Earnings

Amazon stock rallied 6.2% after reporting third-quarter earnings on Oct. 31.

The company beat expectations with a 52% increase in earnings, to $1.43 per share. Sales growth of $158.9 billion, up 11% year over year, also beat expectations.

While Amazon's sales forecast for the current quarter came in lighter than expected, the company's operating income impressed.

Analysts Name Amazon Stock Top 2025 Pick

The 30-year-old Amazon is among the world's most valuable companies. It is a leader in e-commerce spending and in cloud computing through its Amazon Web Services business. It is also quickly growing its advertising business into a challenger to Google (GOOGL) and Meta (META). Amazon joined the blue-chip Dow Jones Industrial Average earlier this year.

Despite the stock's strong push to record highs, Wall Street analysts still see room to run for Amazon.

Of the 73 stock analysts following Amazon, 95% have a buy rating, according to FactSet.

As of Tuesday, the average target price for Amazon stock from analysts is 243.33, FactSet says. The average target implies roughly 8% upside from Amazon's price as of market close Monday.

Amazon stock is typically a popular pick on Wall Street and it appears that will remain in 2025. Analysts with Bernstein recently upped their price target for Amazon to 265, from 235, and named it their "top idea" for 2025.

Bernstein analyst Mark Shmulik told clients that Amazon is successfully defending its e-commerce market share while also reaccelerating Amazon Web Services growth after a slowdown in 2022 and part of last year.

Analysts with Evercore ISI, TD Cowen and Truist Securities also have recently named Amazon as a top pick.

Amazon Market Cap

You can check for Amazon's current stock price here. Amazon's market cap was $2.37 trillion, as of Dec. 24. Here is how the stock has performed over time:

Time Period Amazon Stock % Gain S&P 500 % Gain