Market News & Analysis

Top Story

Amazon Earnings In Covid-19 Era

When:
April 23rd After market close

Expectations for Q1:
  • Exp. Revenue $72.5 billion
  • Revenue AWS $10.3 billion, 
  • EPS $6.35

What to watch:
Whilst the past few weeks have brought turmoil of unprecedented levels to many stocks, Amazon is reaping notable gains as it emerges as the stay at home stock. 

1. Online retail surges
Amazon appears relatively safe from the coronavirus hit thanks to its core business – online retail, which has picked up significantly amid the closure of brick and mortar outlets. Customers are ordering delivery en masse; the company is taking on an extra 175,000 staff to manage the rising demand. Expectations are the many people who started shopping online in the covid-19 lock down will continue to do so even after the lock down ends.
Furthermore, oil prices tumbling will have reduced shipping costs significantly. 

2. Cloud & streaming services
The cloud business is benefiting from lock down amid growing usage from existing & new customers plus AWS powers many leading apps such as Netflix. Disney+ and Apple. Streaming music & videos make it a major player in streaming wars, as streaming media becomes a popular past time for those forced to stay at home

3. Spending
However, Amazon’s spending is always worth keeping an eye on. Spending can outpace revenue even if sales are extremely strong. That said, we have seen in previous efforts such as building out fulfillment centres and cloud computing data centres and investment in Prime one day shipping, that Amazons willingness to spend can be beneficial.

Levels to watch
Amazon surged to a record high of $2461 on hopes on hopes of a coronavirus related boom. The share price has just eased back slightly.
Amazon trades firmly above its 20 & 50 sma in a firmly bullish chart. 
Immediate support can be seen at 2318 (low 17th April) prior to 2188 (low 14th April & high 19th Feb).



Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.