The quarterly earnings season is unfolding, spotlighting two tech giants this week – Amazon (AMZN) and Apple (AAPL). In a mixed bag of results among the “Magnificent 7,” Meta Platforms (META) stumbled, while Tesla (TSLA) and Alphabet (GOOG) surged post their Q1 earnings.
Alphabet recently claimed membership in the prestigious $2 trillion market cap club following its Q1 report. But can Amazon follow suit after its Q1 earnings announcement this Tuesday? Let’s delve into Amazon’s Q1 earnings estimates to gauge the possibilities.
Amazon’s Q1 Earnings Estimates
Analysts anticipate Amazon to unveil revenues of $142.5 billion in Q1, marking an 11.9% year-over-year increase. Amazon’s Q4 earnings call forecasts Q1 revenues between $138 billion and $143.5 billion, suggesting a growth range of 8% to 13%.
The company eyes operating income between $8 billion and $12 billion, significantly higher than the $4.8 billion reported in Q1 2023. Consensus estimates project Amazon’s Q1 earnings per share (EPS) to soar 164% year-over-year to $0.82. The tech giant’s renewed focus on efficiency has bolstered its profitability, outstripping its revenue growth.
A Riveting Q1 Earnings Season
Netflix (NFLX) nosedived post its Q1 report, despite beating earnings, citing a shift from quarterly subscriber disclosures. Conversely, Tesla (TSLA) soared despite missing forecasts, triggering a relief rally on positive management updates.
Amazon remains relatively unscathed in terms of price swings, with a modest 18% year-to-date growth as it cautiously reverts from overbought levels earlier this month.
Can Amazon Ascend to a $2 Trillion Valuation?
There’s a palpable prospect for Amazon to reach the $2 trillion mark post its Q1 earnings. The company’s recent earnings showings, robust free cash flows, cost efficiency drives, AI initiatives, and burgeoning advertising arm, especially with Prime’s ad-supported version, enhance this probability.
Notably, JPMorgan firmly reinstated Amazon as its flagship 2024 bet, underscoring the company’s forecasted store growth, boosted North American margins, and surging international profitability ahead.
Bullish Long-Term Outlook for Amazon
Amazon’s long-term forecast looks promising, with its eCommerce, Amazon Web Services (AWS), Amazon Business, pharmacy segment, ad business, and Generative AI ventures providing robust growth avenues. Trading at a next 12-month price-to-earnings multiple of about 43x, Amazon seems poised for significant market cap growth in the near future.
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