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by Daman Securities LLC

Amazon’s 2024: Growth Drivers, Challenges, and What’s Next 

Amazon was one of the best stocks in the tech sector, rising 50% in 2024 as the e-commerce and cloud computing company posted a 20% rally since the start of October. 

Amazon’s cloud computing division, Amazon Web Services (AWS), was a key driver of the company’s growth in 2024. AWS remains a key source of revenue for Amazon, with revenue expected to grow by 21% this year. The division benefited from the increasing migration of enterprise workloads to the cloud, as well as its focus on generative AI offerings, which is a rapidly growing sector. 

Amazon also announced retail innovations, such as updated versions of its Kindle devices and its shift into nuclear energy to power its massive data centers, demonstrating its commitment to sustainability and technological advancement. 

Amazon’s stock rose 6.2% after reporting third-quarter earnings in October. The company exceeded expectations with a 52% increase in earnings to $1.43 per share. Sales growth of $158.9 billion, or 11% year on year, also exceeded expectations. While Amazon’s sales forecast for the current quarter was lower than expected, the company’s operating income was positive. 

However, despite the impressive performance, Amazon experienced substantial challenges. Workplace safety issues persisted at Amazon, with a Senate investigation finding greater injury rates in Amazon warehouses than in the entire sector. These findings have sparked criticism, with claims that Amazon prioritizes speed over employee safety. 

Increased competition from retail behemoths such as Walmart created a challenge to Amazon’s Fulfillment by Amazon (FBA) program, as competitors strengthened logistics networks and offered fulfillment services at more competitive prices. Regulatory scrutiny also continued, with antitrust litigation adding uncertainty to Amazon’s business situation. 

Technical Analysis 

Source: TradingView 

Amazon stock looks to be trading in a strong uptrend with the 200 EMA potentially adding bullish support. The price later pulled back from all-time highs at $233. If bullish momentum continues, price could look to regain ground above $226 to hold its bullish trend as traders monitor the $233 level as resistance. If bulls fail to push the price higher, bears may look to take control with potential support forming around $218, potentially reversing the trend. 

Sources: MarketWatch, Investor’s Business Daily 

The information provided is not intended to serve as investment advice or a sufficient basis for making investment decisions. It is meant solely for informational purposes.

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