Amazon Q4 2024 earnings preview: how cloud and advertising sectors drive growth
As Amazon prepares to announce its fourth quarter 2024 earnings, attention turns to the company's performance in key sectors like cloud services and advertising.
Amazon Q4 2024 earnings outlook
Amazon is set to report its fourth quarter (Q4) 2024 earnings after the market closes on Thursday, 6 February 2025 (date subject to change).
Amazon is an American multinational technology company specialising in e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence (AI). It is a member of the 'magnificent seven,' alongside Tesla, Microsoft, Nvidia, Apple, Meta, and Alphabet.
Q4 expectations
- Revenue: $187.3 billion
- Earnings per share (EPS): $1.48
Q3 highlights
Amazon's third-quarter (Q3) results, delivered in late October, exceeded Wall Street's expectations, boosting its share price by 6.19% in the following session to close at $197.93.
- Revenue: $158.9 billion, surpassing the expected $157.2 billion
- EPS: $1.43, exceeding market forecasts of $1.14
- In cloud, Amazon Web Services (AWS) revenues increased by 19% year-over-year (YoY) to $27.5 billion
- Advertising revenues grew by 19% YoY to $14.3 billion
- Amazon's capital expenditure (capex) surged 81% YoY to $22.62 billion, driven by investments in technical infrastructure like data centres and Nvidia graphics processing units (GPUs) used for AI.
Amazon net sales chart
On the Q3 2024 earnings call, Amazon Chief Executive Officer (CEO) Andy Jassy stated that the company plans to spend about $75 billion on capital expenditure (capex) in 2024 and might spend more in 2025. Jassy remarked, 'It is really an unusually large expenditure,' driven by a 'maybe once-in-a-lifetime type of opportunity,' referring to the AI phenomenon.
What to watch for?
- Advertising: shareholders will look for continued robust growth in advertising, driven by initiatives such as incorporating advertisements into Prime Video shows, movies, and live sports
- Guidance for future quarters: investors will watch for guidance on future earnings, revenues, and planned capex expenditures, which can significantly impact margins and profitability
- AWS performance: as more businesses shift their data storage to the cloud, there will be keen interest in growth in this AI-heavy sector of Amazon.
AWS revenue chart
Amazon technical analysis
Amazon’s share price gained 44% in 2024, outperforming the Nasdaq 100, which gained 24.88% during the same period. After hitting a fresh record high of $233 in mid-December, Amazon’s share price has spent the past five weeks consolidating recent gains. It appears to be rebuilding energy for another push higher.
If Amazon's earnings meet and exceed expectations, there is weekly trend channel resistance at $240, coming from the $114 high back in early February 2023.
In the event of earnings disappointment, there is uptrend support at $215, which will provide initial support coming from the $151.61 low of August 2024. Below is horizontal support at $200, reinforced by the 200-day moving average at $192.
Amazon daily chart
- Source: TradingView. The figures stated are as of 23 January 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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