Amazon Stock Price Soars on Record Holiday Sales, Company Crosses $1 Trillion Valuation

Shares of the e-commerce giant Amazon soared in after hours trading Thursday after the company crushed analysts estimates for fourth-quarter profit. This caused the stock to surge 10% in after hours trading and ultimately cross the $1 trillion valuation, thus joining the exclusive $1 trillion group consisting of Apple, Microsoft, and Alphabet.

Fundamental analysis: Record holiday sales 

The company reported earnings of $6.47 per share, while market analysts expected $4.04 a share. A year ago, Amazon reported earnings of $6.04 per share. 

Amazon also reported record quarterly sales of $87.4 billion, more than 20% higher than $72.3 billion reported a year ago. Analysts expected the company to generate $86 billion in sales for the fourth quarter.

Moreover, Amazon said that it has more than 150 million paid Prime members globally. 

Amazon Web Services (AWS), a subsidiary of Amazon that provides on-demand cloud computing platforms, reported an increase of 34% in sales compared to a year ago. AWS competes with Microsoft’s Azure and Google Cloud Platform in this field. 

Amazon said it expects to generate between $69 billion and $73 billion in sales for the next quarter, which is in line with market expectations of $71.6 billion.

Technical analysis: Fresh all time high likely to happen

The Amazon stock price trades at $2055.50 in premarket trading session after hitting $2113 following the release of Q4 earnings. The all-time high, printed in September ‘18, is at $2050.50, hence, there will be no surprises when the fresh high is set today. 

As seen in the chart above, the Amazon stock price is well-supported between $1,700 and $1,800 by the 200-DMA, and the ascending trend line (the 200-DMA). The premarket push higher will create a gap that leaves the price action outside the wedge. 

Hence, an open and daily/weekly close above $2,055 will pave the way for more gains. This level also offers a good entry for those seeking to buy Amazon stock. The next target for the bulls is $2,260. 

Summary

Amazon crushed market expectations for the fourth-quarter on record holiday sales. As a result, the stock price trades around 10% higher and is likely to open at an all-time high. The bulls will now push the price toward the next major resistance around $2,260.