Amazon stock Forecast & Predictions for 2021, 2022-2025 and Beyond
2021-04-01
2021-04-01
Amazon Stock Price Prediction: 2021 And BeyondJana Kane
Everyone is looking for the best stocks for 2021. Selecting individual stocks can, therefore, be quite tricky. Articles like these are meant to inspire you. The year 2020 has once again shown that things can change very quickly. Investors who do not respond to changes in the world can suddenly be presented with a bad investment result. Today we are going to talk about the Amazon share price forecast; the e-commerce giant.
The article covers the following subjects:
Amazon is a leading provider of online retail services through amazon.com and amazon.ca, providing global sales through Amazon Web Services (AWS) for computing, storage, database, and corporate cloud services. The company was founded by Jeff Bezos in 1994 and is headquartered in Seattle, Washington.
On the day of the IPO, May 15, 1997, [AMZN’s stock][1] went through the $18 to $23.50 range, bringing the company’s value to $560 million. By the 20th anniversary of the IPO, Amazon’s closing price reached $961.35, which equated to a market value rating of about $466.2 billion. The driving force behind the total operating income growth is the AWS segment, which keeps RCF/debt (cash flow/debt) at over 50%. Amazon stock has rallied to an all-time high above $2,200. Today, one of the major US indices, S&P 500 is also [dominated by Amazon][2].
Amazon’s shareholder return policy is conservative as the company does not pay dividends, and share buybacks have been minimal in the past few years. The company’s traditional financial policy has a positive effect on liquidity. But let’s find out some fascinating history, first.
A Short History of Amazon
Amazon is one of the oldest and largest online stores in the world. Every day, the company sends millions of parcels around the world. Where did it all start? How did the company evolve from an online bookstore to a tech giant?
Amazon founder Jeff Bezos worked on Wall Street, New York’s financial center, in the early 1990s. He foresaw a great future for the internet and knew he would regret it if he didn’t dive into it. After reading a report that predicted that the buying and selling of products on the internet would increase sharply, he decided to sell books online: they were in high demand, relatively cheap to buy, and widely available. The great thing about the internet is that it has no shortage of space. As of July 1995, the Amazon.com site had been online, run from the garage of Bezos’ house.
The name Amazon was not Bezos’s first option, by the way. Initially, he registered his company as Cadabra but changed his mind when his lawyer overheard the name over the phone as “cadaver.” He then changed the name to ‘Relentless,’ but that word also evokes the wrong associations. After going through the dictionary, Bezos finally settled on ‘Amazon.’ According to the founder, it sounded “exotic and different” and refers to the world’s largest river (the Amazon). It’s appropriate because Bezos wants to make his online store the largest company in the world.
Soon Amazon was doing a lot more than selling books. At the end of the nineties, you could also order films, games, electronics, software, toys, and much more from the company. Today, there are about 400 million different products in the web store. Besides, Amazon now offers even more services, such as video streaming service Amazon Prime Video, digital personal assistant Amazon Echo, e-book store Kindle, and film company Amazon Studios. The company even wants to have parcels delivered by drones with the Prime Air service. Amazon has therefore grown into much more than a webshop. The company is often mentioned in the same breath as other large technology companies.
As Amazon continues to perfect its online store at the beginning of this century, the realization has gradually arisen that the company is a technology goldmine. The computer systems on which the online store runs have become so good that Amazon came up with the idea of selling the systems itself. You can think of storage, data analysis, and networks. In this way, Amazon has become the market leader in “cloud computing,” or the provision of computer systems via the internet or the cloud.
The company is also growing through acquisitions. In 2017, Amazon bought the American supermarket chain Whole Foods for 13 billion dollars.
Amazon in 2021; Stock Price Today
On Nasdaq, Amazon.com, Inc. Common Stock (#[AMZN][3]) is currently traded at $3 160.74.
But we will discuss the king of e-commerce in detail. Although the share has increased significantly in recent years, the end does not seem in sight here either. Amazon was named one of the most innovative companies in the world by Forbes. Not only is the number of products sold growing strongly, but the cloud division is also showing double-digit growth. Amazon has since grown into one of the largest cloud providers in the world. Amazon has also expanded its portfolio with a video service and released a massive budget of $ 4.5 billion USD to invest in unique content in the coming years to draw viewers to Amazon Prime Video.
Sales in 2020 will be approximately $380 billion, which is a spectacular increase of 35%. This cumulative growth also appears to continue in the coming years. With a market capitalization of approximately $1,660 billion and a P/E of 90, the stock seems shockingly expensive. If we take the profit of 2021, this valuation drops again to approximately 59, so this growth also justifies the valuation. Amazon has only just started conquering Europe, so there is still plenty of growth potential here too. The first figures are promising; the group can push away the competition with low prices through economies of scale. That’s why Amazon.com stock belongs on the list of the best stocks for 2021!
Amazon Stock Price Predictions: What Do Experts Say?
What trends are the industry experts predicting for Amazon in 2021? Let’s find out!
Amazon has already [become a pay-to-play platform][4]. To sell and rank your products on Amazon, you need to pay for advertising. Unlike many other platforms, Amazon offers advertisers something irresistible: a closed-loop that shows how effective every dollar they spend is, as well as more than two decades of insight on the actual buying habits of consumers, rather than just their web-browsing practices. “I can understand better the value of $1 spent on Amazon because I can literally see the transaction,” – Eric Heller, who runs the Amazon Center of Excellence at WPP, the world’s largest ad agency, for the Financial Times.
“Amazon Ads is evolving at a super-fast rate, and while the platform is still very fundamental compared to Facebook or Google Ads, it’s slowly becoming comparably sophisticated. In 2021 I predict Amazon will be releasing new features at an even faster rate”, comments Danny Carlson, an Amazon E-com Expert specializing in PPC Management & Listing Optimization who founded the Agency [Kenji ROI: ][5]“Based on what we’re hearing from our Amazon Ads representative, there are many different initiatives in the works that will bring Amazon Ads platform closer to the complexity of Facebook with increased ability to use images, headlines, and off Amazon targeting to differentiate your ads.”
Bloomberg is also very rosy about AMZN stocks, [predicting][6] a one year return of 68.65%.
Similar thoughts come from Lazar Žepinić, who has been working on PPC for over a decade, today founder of [Sellers Alley: ][7]“In 2021, Amazon will focus more on improving its ad platform, just like it did with Sponsored Display Ads, and adding new price targeting options for brand- registered sellers. We expect to see enhancements in advertising reporting to help sellers better understand their ad performance.”
Selling anything possible on Amazon’s web estate has been a priority for a long time. According to Will Tjernlund, who has been selling on Amazon since 2013 and is the co-founder of [Goat Consulting, ][8]“in 2021, Amazon will allow non-Amazon products to advertise within Amazon’s ecosystem. Examples are a monthly workout plan for people who bought weights or car insurance ads to people who searched for tire repair kits”.
AMZN Technical Analysis
As usual, we’re beginning our Amazon stock technical analysis with the biggest time frame.
The 1-month time frame of [AMZN][9] quotes is presented in the chart above. It’s convenient for us to look for global trends and key support/resistance levels there.
The Amazon prediction chart suggests that the minimums have been regularly updated since March 2020. The maximums have been growing too. There has been a stable bullish trend. However, the ascending price movement discontinued in September 2020. The market has then consolidated in the past six months.
The blue dots mark the candlesticks forming the key levels in the chart. The earliest upsurge in trading activity gave rise to the bullish trend in March 2020. According to the price history analysis, March’s candle has pushed off from the powerful support level at 1,300 USD (red line), thus confirming its importance.
The following candle is linked to the bullish price movement’s stop in September 2020. At that moment, big investors fixed profits, and trading volumes, therefore, soared in the chart. That monthly candle’s peculiarity is that it updated the historical high and simultaneously marked a new local minimum where a powerful support level is now located. That’s how the current trading range’s limits of 2,870- 3,546 USD have formed.
Amazon stock forecast for next three months
Let’s now switch to the weekly time frame and try setting a price target for the nearest three months.
Since neither monthly nor weekly time frame provides trend reversal signals, the bullish movement’s continuation is the likeliest medium- term outlook. However, the market can be expected to continue consolidating in the coming months like it did from May 2018 until March 2019 (marked with the red circles).
From April to June, the [AMZN][9] shares will most probably fluctuate in the range of 2,870 - 3,540 USD, gently attempting to form a local minimum at the lowest limit of the trading range. A sharp upsurge in trading activity, with the price located at around 2,870 USD, may become an indirect indication of a further upward movement.
The projected growth will be confirmed if the resistance level of 3,540 USD is crossed. So, if you are planning to open a long trade at the bottom of the bullish wave, I suggest keeping at least half your money to build up the trade later after the level of 3,540 is broken.
In an alternative scenario, the AMZN price chart may move down after consolidation. That may happen if a future price consolidates below 2,870 USD.
The [AMZN][9] price history suggests that the level of 2,000 USD will then be the nearest target. The market’s powerful moves used to lose their potential at that psychological level in 2018 and 2019.
What will be the price of Amazon shares in 2021?
To make a realistic prediction for this year, I plotted monthly candlesticks’ projections considering Bollinger bands’ width. Obviously, the price will be forming a local minimum up to the beginning of July, approaching the range’s lowest limit at 2,810 USD.
Next, the ascending movement will probably continue, and the Amazon projected stock price will have exceeded the value of 3,540 USD by September-November, crossing the range’s upper limit. At the end of the year, the Amazon stock will probably trade above that level, at around 3,590-5,000 US dollars.
The table below provides projected minimums and maximums for each month.
Month
|
AMZN Rate
—|—
Minimum
|
Maximum
April 2021
|
2,940
|
3,280
May 2021
|
2,900
|
3,240
June 2021
|
2,810
|
3,150
July 2021
|
2,830
|
3,270
August 2021
|
2,990
|
3,460
September 2021
|
3,170
|
3,740
October 2021
|
3,330
|
4,020
November 2021
|
3,600
|
4,300
December 2021
|
3,880
|
4,500
AMZN Technical analysis is presented by [Mikhail Hypov][10].
Amazon Stock Price Forecast 2022 - 2023
Amazon stock price predictions for January 2022: Beginning of the year. The forecast for the beginning of January 2022 is 3782 with a maximum value of 3809 and a minimum of 3377. The average Amazon stock price for the month is forecasted at 3640. With a price at the end of the month at 3593, this is a change for January of -5.00%.
Amazon stock predictions for December 2022. Year’s end. The Amazon stock forecast for the beginning of December 2022 is 4051 with a maximum value of 4414 and a minimum of 3914. The average Amazon stock price prediction for the month is forecasted at 4136. With a price at the end of the month at 4164, this is a change for December of 2.79%.
Amazon stock price predictions for January 2023: Beginning of the year. The forecast for the beginning of January 2023 is 4164 with a maximum value of 4634 and a minimum of 4110. The average Amazon stock price prediction for this month is forecasted at 4320. With a price at the end of the month at 4372, the change for January should be 5.00%.
Year
|
Month
|
Min
|
Max
|
Close
|
Total%
—|—|—|—|—|—
2022
|
Jan
|
3377
|
3809
|
3593
|
10.32%
2022
|
Feb
|
3547
|
3999
|
3773
|
15.84%
2022
|
Mar
|
3640
|
4104
|
3872
|
18.88%
2022
|
Apr
|
3658
|
4126
|
3892
|
19.50%
2022
|
May
|
3776
|
4258
|
4017
|
23.33%
2022
|
Jun
|
3587
|
4045
|
3816
|
17.16%
2022
|
Jul
|
3462
|
3904
|
3683
|
13.08%
2022
|
Aug
|
3635
|
4099
|
3867
|
18.73%
2022
|
Sep
|
3454
|
3894
|
3674
|
12.80%
2022
|
Oct
|
3627
|
4089
|
3858
|
18.45%
2022
|
Nov
|
3808
|
4294
|
4051
|
24.38%
2022
|
Dec
|
3914
|
4414
|
4164
|
27.85%
2023
|
Jan
|
4110
|
4634
|
4372
|
34.23%
Data is taken from longforecast.com/
Long Term Amazon Stock Forecast 2025 – 2030
According to [Gary Gagliardi][11], Founder, and CEO at the Science of Strategy Institute, in 2021, the AMZN stock price will go over $3,000, but the market, in general, will be weaker during that year. By 2025, Amazon’s stock price should reach $5,000, and by 2028 it will most likely hit about $10,000, give or take 20%.
Gagliardi’s prediction assumes that the company is not broken up by that time. Suppose Amazon is broken into several smaller companies; you can double or triple all these values. The individual companies will grow better as independent companies than they will as part of a very, very large diversified company. The chances that Amazon is divided into smaller companies in the next ten years is about 50%.
Keep in mind that such long-term price forecasts are indicative. Estimates for such a long time are very approximate and those Amazon stock forecasts certainly cannot be considered as investment advice.
Amazon Stock Price History
How has the price of the [Amazon stock][3] changed over time? To make the most reliable stock price predictions, it’s crucial not just to look ahead but also to look back at the previous price performance of Amazon stocks. Below you’ll see how Amazon performed over the years of its existence:
Image source: Nasdaq 100
Factors that Can Affect the Amazon Stock Price
Stocks rise and regularly fall - choosing the best time to buy or sell is very difficult. Almost everything affects quotes: from the state of the world economy to the momentary mood of investors. However, there are several factors on which the Amazon share price forecast depends the most
We note right away that the market value of securities is determined by supply and demand. If, for one reason or another, the demand rises, the stock price rises. Conversely, if demand falls, stocks become cheaper. Understanding the factors that shape the demand for securities will help you anticipate changes in quotations in time and improve long-term investment results.
1. Global Market Situation
Trends in the global economy affect the business of specific companies and largely determine the behavior of investors. A striking example is the coronavirus situation, which put pressure on the entire stock market prediction. Amid uncertainty and general panic, investors began to get rid of risky assets - as a result, many companies’ shares fell to record lows.
2. Long-Term Trends
Long-term trends in the global economy have a more stable influence on securities quotes. These include the development of renewable energy and green industries, the growth of the technology sector, and social projects’ proliferation. Companies that succeed in these industries can generate significant returns for investors over a long period.
For instance, Amazon launched the Fire Phone in 2014 to compete with Android phones and Apple’s iPhone. It was a total failure. Amazon lost $ 170 million on the phone that was withdrawn from the market after just one year. The Amazon Fresh shopping service was another fail and has now been discontinued in many areas.
3. A Company’s Financial Results
The AMZN share price usually changes after the company publishes the next quarterly or annual revenue reports. If the results exceed the earnings expectations of experts and investors, stocks rise, and if they turn out to be lower, they fall. When analyzing the issuer’s reporting, one should pay attention to four key parameters: net profit, revenue, capitalization, and debts. It is desirable that the first three grow and the latter decrease.
4. Analyst Forecasts and Investor Sentiment
Another factor involved in the formation of demand for AMZN shares is expert forecasts. Investment bank analysts monitor companies’ macroeconomics, news, and financial results, conduct technical analysis and generate price changes based on the data received. You can find out about them from specialized media or reviews of investment ideas.
If investors share experts’ opinions and expect that some event will happen - for example, a company will make a good deal or receive a high net profit - they start buying shares without waiting for the event itself. As a result, the demand for securities is growing, and they are becoming more expensive.
5. News
Investigative journalism, the publication of inside information, and outright stuffing have a substantial impact on stock prices and Amazon share price forecasts. Quotes can be influenced by reports that someone from the management has discovered health or legal problems or plans to release a new line of products, conclude a significant deal or open a new production line. Amazon is regularly in the news because of its great power and poor working conditions in distribution centers.
Stories regularly emerge about the harsh conditions in which employees have to work. For example, a documentary from CNBC shows that American employees are continually monitored. Employees call the work rate relentless. They are charged for every second that they are not working, but were, for example, on the toilet. Similar abuses have been revealed at German and UK distribution centers. That is why Amazon employees regularly go on strike.
Conclusion: Are Amazon Stocks A Good Investment?
Calling Amazon a top share in eCommerce doesn’t get you points for originality. Investors who have bought the stock at almost any point in its publicly traded history have made a crushing return. Now is still a great time to buy Amazon stock. Amazon currently controls about half of the US business-to-consumer e-commerce market. The online retail giant has also shown that it is better at innovating than just about any other company.
In addition to its industry-leading e-commerce service, Amazon is the market leader in cloud computing. The company is also building a fast- growing position in an industry parallel to online retail: digital advertising. Recent research from Cowen estimates that the company’s platform will account for about 13% of global ad sales, excluding the Chinese market. There is a significant overlap in the technology and data needed to move e-commerce, cloud computing, and digital advertising companies forward, making Amazon stronger as a whole. The company can also be seen as an early leader in potentially revolutionary trends, including artificial intelligence, robotics, and autonomous vehicles.
Amazon is one of the best companies in the world and has shown a market- shaping love of innovation. The company’s already sheer size means it will be more challenging to achieve relative growth than smaller players in the space. Still, Amazon stands out as a trusted market leader, offering attractive risk-reward dynamics for growth investors.
Year
|
Mo
|
Min
|
Max
|
Close
|
Total%
—|—|—|—|—|—
2021
|
Jan
|
2953
|
3364
|
3142
|
-3.53%
2021
|
Feb
|
2871
|
3237
|
3054
|
-6.23%
2021
|
Mar
|
2904
|
3274
|
3089
|
-5.16%
2021
|
Apr
|
3048
|
3438
|
3243
|
-0.43%
2021
|
May
|
2896
|
3266
|
3081
|
-5.40%
2021
|
Jun
|
2751
|
3103
|
2927
|
-10.13%
2021
|
Jul
|
2889
|
3257
|
3073
|
-5.65%
2021
|
Aug
|
3033
|
3421
|
3227
|
-0.92%
2021
|
Sep
|
3185
|
3591
|
3388
|
4.02%
2021
|
Oct
|
3344
|
3770
|
3557
|
9.21%
2021
|
Nov
|
3511
|
3959
|
3735
|
14.68%
2021
|
Dec
|
3555
|
4009
|
3782
|
16.12%
Data is taken from longforecast.com/
Quotes for the Amazon stock outlook change every day - it is impossible to predict them with 100% accuracy. But knowledge of the factors influencing the business of specific companies allows you to navigate the stock market better, interpret news correctly, and consciously choose assets. But by stock trading, investors can earn a lot of money. You are welcome to register an account on Liteforex. If investing in Amazon stocks seems like an exciting idea, you’re welcome to register a free demo account on LiteForex! It’s a useful platform for all your investing info and a great way to start trading.
When assessing the prospects for a particular security, including the Amazon stock future, please pay attention to the global economy’s situation, long-term market trends, government regulation’s impact on the company’s activities, and its financial outlook and results. Consider also the analysts recommendations and news about the issuer, but remember that in most cases, they affect the AMZN stock price in the short term and do not always reflect the real state of affairs in the company.
Amazon Stock Prediction FAQs
_ Disclaimer: The content on this website is not investment advice. Investing or trading involves risks, be aware of that. Always do your own research!_
Price chart of AMZN in real time mode
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.
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- my.liteforex.com/trading/chart?symbol=%23AMZN
- www.cnbc.com/2020/01/28/sp-500-dominated-by-apple-microsoft-alphabet-amazon-facebook.html
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