Amazon Earnings In Covid-19 Era

Shares trade just off all time high ahead of strong expected earnings

Tech (1)

When:
April 23rd After market close

Expectations for Q1:
  • Exp. Revenue $72.5 billion
  • Revenue AWS $10.3 billion, 
  • EPS $6.35

What to watch:
Whilst the past few weeks have brought turmoil of unprecedented levels to many stocks, Amazon is reaping notable gains as it emerges as the stay at home stock. 

1. Online retail surges
Amazon appears relatively safe from the coronavirus hit thanks to its core business – online retail, which has picked up significantly amid the closure of brick and mortar outlets. Customers are ordering delivery en masse; the company is taking on an extra 175,000 staff to manage the rising demand. Expectations are the many people who started shopping online in the covid-19 lock down will continue to do so even after the lock down ends.
Furthermore, oil prices tumbling will have reduced shipping costs significantly. 

2. Cloud & streaming services
The cloud business is benefiting from lock down amid growing usage from existing & new customers plus AWS powers many leading apps such as Netflix. Disney+ and Apple. Streaming music & videos make it a major player in streaming wars, as streaming media becomes a popular past time for those forced to stay at home

3. Spending
However, Amazon’s spending is always worth keeping an eye on. Spending can outpace revenue even if sales are extremely strong. That said, we have seen in previous efforts such as building out fulfillment centres and cloud computing data centres and investment in Prime one day shipping, that Amazons willingness to spend can be beneficial.

Levels to watch
Amazon surged to a record high of $2461 on hopes on hopes of a coronavirus related boom. The share price has just eased back slightly.
Amazon trades firmly above its 20 & 50 sma in a firmly bullish chart. 
Immediate support can be seen at 2318 (low 17th April) prior to 2188 (low 14th April & high 19th Feb).



More from Equities

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.