The latest report from Mirae Asset Securities indicates a positive outlook for Amazon stock (AMZN US) driven by strong US consumer spending and growth in the cloud sector. This analysis delves into the key points of the report, highlighting Amazon’s stock outlook and investment strategies.
1. Amazon’s Target Price and Current Status
Mirae Asset Securities has set Amazon’s target price at $238 and maintains a buy recommendation. The forecasted 2025 PER (Price to Earnings Ratio) is 44 times, with the firm expecting strong performance despite high-interest rates due to the robust US economy and increased investment in generative AI boosting the cloud division’s performance. The outlook for Amazon stock is thus quite favorable.
- Target Price: $238
- Current Price: $193 (as of June 28, 2024)
- Upside Potential: 23.2%
2. Amazon’s Stock Rise and AI Strategy
Amazon’s stock has been steadily rising, but its AI strategy is considered more conservative compared to competitors. Recent changes, such as the replacement of the cloud division CEO and the planned release of AI agents, indicate strategic shifts. In the medium term, Amazon needs a differentiated AI strategy to stand out among competitors. This is crucial for the long-term growth of Amazon stock.
- Stock Rise Rate: 26.0% over six months, 49.8% over twelve months
- EPS Growth Rate: 58.3% (2024 forecast)
- P/E Ratio: 42.1 times (2024 forecast)
Amazon Stock Trend
Period | Absolute Stock Rise Rate | Relative Stock Rise Rate |
|---|---|---|
1 month | 6.1% | 1.8% |
6 months | 26.0% | 7.3% |
12 months | 49.8% | 14.8% |
3. Q2 Earnings Outlook
Amazon’s Q2 revenue is expected to grow by 11% year-over-year to $148.5 billion, with operating income up by 67% to $12.9 billion. Despite high interest rates, the US consumer economy remains robust, and the highly profitable advertising sector is rapidly growing. Strong performance in the North American e-commerce segment is expected, while the global segment may slow due to a strong dollar and slower European economy. The cloud division is expected to exceed market growth expectations due to intensified AI investments. These factors are all pivotal in shaping the performance and outlook of Amazon stock.
- Q2 Revenue: $148.5 billion
- Q2 Operating Income: $12.9 billion
- Ad Sector Growth: Rapid growth based on extensive user data
- Cloud Division: Expected to exceed market growth due to AI investment
Amazon Q2 Earnings Estimate
Quarter | Net Revenue (million dollars) | Operating Income (million dollars) | Operating Margin (%) |
|---|---|---|---|
1Q23 | 127,358 | 4,774 | 3.7 |
2Q23 | 134,383 | 7,681 | 5.7 |
3Q23 | 143,083 | 11,188 | 7.8 |
4Q23 | 169,961 | 13,209 | 7.8 |
1Q24 | 143,313 | 15,307 | 10.7 |
2Q24F | 148,470 | 12,859 | 8.7 |
3Q24F | 160,807 | 14,782 | 9.2 |
4Q24F | 190,675 | 16,399 | 8.6 |
4. Cloud Division and AI Strategy
Following the replacement of the cloud division CEO, expectations are high for Amazon’s AI strategy. With the competitive landscape in AI agents heating up, Amazon stands to benefit as a top-tier cloud provider. However, Microsoft has been gaining market share with its early investments in OpenAI, highlighting the need for Amazon to enhance its AI-related competitiveness through proprietary models and other initiatives. This will be a significant factor in determining the future value of Amazon stock.
- AWS Revenue: $108,350 million projected for 2024
- AI Strategy: Strengthening the cloud division and launching AI agents
5. Long-Term Outlook and Investment Strategy
In the long term, Amazon’s vast user data and application of generative AI are expected to expand the e-commerce market and increase corporate value. Investors should monitor the detailed plans and execution of Amazon’s AI strategy to gauge the company’s mid- to long-term growth potential. Keeping a close eye on Amazon stock will be crucial for making informed investment decisions.
- Long-Term Outlook: E-commerce market expansion and increased corporate value
- Key Investment Points: AI strategy and cloud division growth
Amazon’s Projected Operating Profit by Division
Below is a graph showing Amazon’s projected operating profit by division.
Segment Performance Estimates
| Segment | Revenue($M) | Operating Income($M) | Operating Margin(%) |
| North America | 390,991 | 22,362 | 5.7 |
| International | 143,923 | 903 | 0.6 |
| AWS | 108,350 | 36,081 | 33.3 |
Conclusion
The Mirae Asset Securities report confirms Amazon’s strong growth potential and investment strategy. The cloud division and AI strategy are expected to be major growth drivers. Investors should continue to monitor Amazon’s stock trends and the detailed plans of its AI strategy to formulate a comprehensive investment plan.
This blog post, based on the data and projections from the report, aims to enhance understanding of Amazon stock and aid in making informed investment decisions. By closely following the progress of Amazon’s stock and its strategic initiatives, investors can better position themselves to capitalize on the company’s growth. The Amazon stock outlook remains robust, driven by innovative strategies and strong market fundamentals.
