E-commerce giant Amazon will release its latest earnings this week. These are the levels to watch.
AMZN: Daily Chart
Amazon (AMZN) broke out of resistance at $114 in May and has paused around $135. The next upside target is $145–150, with support at that $114 level.
On Monday, the company said it had achieved a major milestone in deliveries. Amazon said it has delivered 1.8 billion units to US Prime members on the same or next day, roughly four times what it delivered at those speeds in 2019.
Over the last four years, Amazon has added more money and resources to upgrading its network to reduce shipping times from two days to one or less. Amazon says it achieved its “fastest Prime speeds ever” last quarter.
This week will see Amazon’s second-quarter earnings, and investors want to know how Amazon Web Services (AWS), the company’s cloud offering, compares to Microsoft and Google. Both companies reported slower growth in their cloud businesses in the recent quarter. Amazon previously reported a decrease in growth in AWS as business clients reallocated their spending to reduce costs.
“There is potential for cloud computing, including Microsoft’s Azure, Google Cloud, and AWS, to materially benefit from companies interested in artificial intelligence,” said Tom Forte, a senior research analyst at financial firm D.A. Davidson.
However, as consumers pull back on their spending, companies invested in AI and cloud tools are forced to reconsider their expenses, Forte said.
Amazon Chief Financial Officer Brian Olsavsky said during the company’s first-quarter call in April that he expects the retail giant’s cloud business to slow as its enterprise clients become more “cautious in their spending.”
Investors will also be looking to see how Amazon’s advertising business intersects with AI language models and generative AI. The company’s advertising business was seeing “robust growth” due to its machine learning investment, CEO Andy Jassy said in the first-quarter earnings call.
Investors will again compare the company’s ad business to Google, which reported a 3.3% increase in advertising revenue last week to $58.1 billion despite a broader advertising pullback.
