Amazon stock price forecast: What does AMZN have in store for the rest of the year?
Amazon stock price forecast: What does AMZN have in store for the rest of the year?
Despite Amazon's massive market cap, its stock is still in high demand among investors.
With a market cap of $1.4 trillion, Amazon is one of the largest publicly traded companies in the world. The conventional wisdom is that the larger a company is, the less likely it is to grow because it has to grow more in nominal terms to achieve the same percentage improvement in size.
However, Amazon has shattered those stereotypes. According to the latest analyst projections, the company's earnings will be around $2.23 per share in 2023. This implies that the company will grow 192% over three years, which is significantly higher than the S&P 500's average growth of 38% over the same period.
Admittedly, there is some uncertainty in such projections, but if they come true, Amazon's market capitalization will exceed $4.1 trillion.
Amazon's success is largely due to its reliance on fast-growing small businesses, such as AWS, which generate the lion's share of its profits. The company also laid off 27,000 employees across its divisions during the year, significantly cutting back on less profitable businesses and optimizing its network.
AMZN stock is now trading at $143.12, up 3.15% since the last session.
It's worth noting that Amazon's 61% year-over-year growth has led to a significant valuation for Amazon stock, with a price-to-earnings (P/E) ratio of 42, well above the S&P 500 average of 25, suggesting a possible overvaluation. Keep in mind, however, that the stock is still 26% below its all-time high set more than two years ago.
Amazon stock has been trading sideways recently and has formed a clear pattern over the past 6 weeks: a bull flag. However, during Monday's trading session, the stock broke above the upper boundary of the range, signaling a breakout. The stock is expected to continue rising for the rest of the year until it returns to its trading range.
See also: ETH price could drop to $1,400.
