Shares of initially went down when having crossed over the halfway point of last week to touch a two-month dips around $166.5, battered by a slight shock from a double-digit corrective move of Meta Platforms. But this did not last long. Markets' belief in the power of sales on Amazon is strong enough for the price to bounce back above $175 the next trading session. An enthusiastic crowd proved right when making the E-commerce giant soaring once again, as its quarterly numbers clearly surpassed experts estimates on the night of May 1.

Some persistent losses of the S&P 500 broad indicator to follow the Federal Reserve's unchanged rate decision, as the central bankers rather downplayed chances for more rare hikes, partially prevented further gains after Amazon's quick re-test of the uncharted territory above $185 per share. Yet, the prospects look rosy, especially as Amazon Web Services (AWS), a growing cloud segment, added 17% on an annual basis to reach $25 billion in revenue. This topped consensus forecasts of about 14.5% to 15% growth. The sales of AWS for the whole year are now running at more than $100 billion, contributing more and more to the company's delivery business. "The combination of companies renewing their infrastructure modernization efforts and the appeal of AWS’s AI [artificial intelligence] capabilities is reaccelerating AWS’s growth rate," the company commented on the results.

All in all, announced its quarterly EPS (equity per share) of $0.98 on revenue of $143.31 billion, against average expectations of $0.84 on revenue of $142.65 billion. For the next quarter, Amazon CEOs suggested sales figures in the range between $144 billion and $149 billion. Even though consensus on Wall Street were betting at nearly $150 billion, this did not stop the bullish bias. Such estimates mean 7% to 11% YoY, being higher than $143 billion in Q1. Operating income is supposed to range between $10 billion and $14 billion, compared with $7.7 billion in Q2 2023. an analyst pool 12-month price target for Amazon is still above $215 per share, which means another 20% upside. Thus, no one among large investment houses expect a solid price adjustment for Amazon before the market reaches this area. Amazon's solid performance is also a bright beacon for other mega caps on Wall Street.

This spring was not the best time for the “Magnificent Seven” stocks, yet the last three quarters showed very healthy margin expansion opportunities, happily used by Amazon. The operating cash flow jumped by 82% YoY, while free cash flows spiked to $50 billion from an outflow of $3.3 billion, allowing to make bigger investments into generative AI. These financial results were achieved despite a pre-tax valuation loss of $2 billion from Amazon’s investment in Rivian Automotive vs a similar kind of loss of just $500 million in the same season of 2023. Customer experiences and businesses are changing because of this, so Amazon CEO Andy Jassy sees "considerable momentum on the AI front, where we’ve accumulated a multi-billion-dollar revenue run rate already”. However, "we don’t spend the capital without very clear signals that we can monetize it this way. We remain very bullish on AWS,” he added. That's why our own estimated target lies between $230 and $250 per share, or even 7% to 16% above the strong consensus pool target of large investment houses.