April 23rd After market close
- 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
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).