Amazon’s Stock Plummets: A Prime Investment Opportunity?

The Recent Performance of Amazon Stock

In the recent stock market sessions, Amazon (AMZN) has experienced a significant decrease, dropping by approximately 25% after the quarterly earnings report.
This decline was further exacerbated by the recent concerns stemming from the increase in unemployment in the United States, fueling worries about a potential economic recession.

Recovery and Investor Sentiment

However, in the latest sessions, AMZN shares have partially recovered from the slump, marking an increase of about 8% from the lows.
This sudden recovery has raised new questions among investors: does the drop in Amazon shares present an investment opportunity? Will the price soon return to previous highs?

Long-Term Outlook for Amazon Stock

To address these queries, it is crucial to analyze Amazon’s long-term fundamentals.
Despite the recent stock volatility, the company’s fundamental growth remains robust.
In its latest quarter, Amazon reported an earnings per share (EPS) of $1.26, a significant rise from the previous year’s $0.65.

However, what disappointed the market were the sales figures and future forecasts.
Analyst expectations were extremely high and were not fully met, despite substantial growth compared to the previous year.
As a result, many investors took the opportunity to capitalize on short-term profits, contributing to the stock decline.

Oversold Territory?

From a technical perspective, Amazon’s stocks have entered a technically oversold zone as the price hit the $150 mark.
This is because the Relative Strength Index (RSI) dropped below 30, a signal that has often indicated a price floor for the stock in the past.

Growth Prospects and Focus on AWS

One of Amazon’s main growth drivers is its cloud computing service, Amazon Web Services (AWS).
In a landscape where all major tech companies are posting outstanding results in the cloud sector, AWS stands out as one of the market leaders.

In the recent quarter, AWS sales reached $26.3 billion, with a growth of 19%, surpassing expectations.
This segment instills confidence in investors as the US cloud market holds massive potential, with an estimated annual growth rate of 13% from 2023 to 2030.
The ongoing success of AWS could uphold the value of AMZN shares, even amid general economic uncertainty.