Yahoo Finance Amazon (AMZN) Gains 3.9% to Breach the $2 Trillion Mark
On Jun 26, Amazon.com, Inc.’s AMZN shares advanced 3.9% and breached the $2 trillion mark for the first time in its history. This development makes Amazon the first company in the Zacks Internet – Commerce sub-industry and the fifth company overall to cross the landmark valuation.
Of these companies, Microsoft Corporation MSFT and NVIDIA Corporation NVDA, both of which are valued at more than $3 trillion, are contesting to become the largest company in the world, with NVIDIA briefly surpassing Microsoft in recent sessions. Apple, too, is a $3 trillion company, while Google parent Alphabet is currently the only other company alongside Amazon in the $2-$3 trillion range.
Seattle-based Jeff Bezos-led Amazon has had a fantastic year so far. As of Jun 26, its share price increased 27.4%. It currently has a Zacks Rank #3 (Hold) but is expected to be upgraded in the coming months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In May, the e-commerce giant reported first-quarter 2024 earnings of 98 cents per share, surpassing the Zacks Consensus Estimate of 82 cents and the year-ago earnings of 31 cents. Revenues grew 13% year over year to a record high of $143.3 billion and edged past the consensus estimate of $142.5 billion. New generative AI features in its cloud and e-commerce businesses drove its robust growth. In fact, AI optimism has been the single biggest factor that has been driving the revival in mega-cap tech stocks since the onset of 2023.
Amazon expects revenues in the range of $144-$149 billion for second-quarter 2024, suggesting year-over-year growth of 7-11%. The Zacks Consensus Estimate is currently pegged at $150.3 billion. Its expected earnings growth rate for the current year is 57.9%. The Zacks Consensus Estimate for its current-year earnings has improved 11.7% over the past 60 days. The company has a VGM Score of A.
Amazon Web Services (AWS) is currently the largest cloud services provider in the world, and Amazon has also invested in AI startups, looking to leverage the AI boom. In 2023, Amazon unveiled new custom-designed chips used in data centers. The generative AI boom is likely to increase demand for AWS as well as the company’s AI-platform building tool
While being undeniably pricey, Amazon presently trades at a 40.67 forward P/E ratio. The industry’s forward earnings multiple, on the other hand, is 25.20. This entails that investors believe that the stock can generate more profits in the future.
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