Amazon.com, Inc. (NASDAQ:AMZN) stock is trading at $106. Technically, the stock is down 37.66% year-to-date. A drawdown in the big tech stocks has been responsible for the Amazon crash this year. At the current price, Amazon is trading at the same level it was at the onset of the pandemic. The view does not consider the recent stock split. Consequently, Amazon is attractive, but bears are in control for now.
Amazon is well rated by Wall Street. Out of 38 analysts tracked by Tipranks, 36 have a buy rating. There is only a single hold and one sell. The average price target is $178.56, representing an upside potential of 68%. Besides these ratings, we believe Amazon represents a good holding for long-term focused investors.
First, Amazon’s latest 20-for-1 stock split offers a catalyst for growth. The stock is yet to price for lasting gains following the stock split. The outcome can be explained by the macro-economic forces which continue to hit tech stocks. We believe once these macro-events subside, Amazon will generate a lot of value for investors.
Secondly, amazon’s fundamentals remain robust. In this case, we look at the revenues, which came at $116.4 billion in Q1 2022, up 7% year-over-year. The sales are expected to rise up to $121.0 billion in Q2 2022. Revenues are indicators of growth for the e-commerce giant.
We believe that investors overreacted to a loss of $3.8 billion in the quarter. The loss was merely due to rising costs amid ongoing supply chain issues, which will lessen in the future.
Amazon attempts to break below minor support of $106
Source – TradingView
Technically, Amazon is set for further decline. The stock is about to break below minor support at $106. Also, for the first time, the stock has crashed below the 200-day MA.
Although the stock is already oversold, we project further declines. Investors should buy after a further drop. The next support is around $86.
Summary
Amazon is strong fundamentally, while Wall Street is banking on a robust stock recovery. Technical analysts point to bearish momentum. Investors should buy after a further dip.
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