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Amazon Q1 2024 earnings preview: what investors need to know ahead of 30 April


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As Amazon gears up to release its Q1 2024 earnings on April 30, market watchers are eyeing potential growth in AI technology, cost-cutting measures, AWS expansion, and advertising revenues.

 

Written by: Tony Sycamore | Market Analyst, Australia
 
Publication date: 

When will Amazon report its latest earnings?

Amazon is expected to report its first quarter (Q1) 2024 earnings after the market closes on Tuesday, 30 April, 2024.

Amazon: a titan among the Magnificent Seven

Amazon is an American multinational technology company specialising in e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It is a member of the so-called "Magnificent Seven", along with Tesla, Microsoft, NVIDIA, Apple, Meta, and Alphabet.

In its Q4 2023 earnings report, Amazon surpassed Wall Street's expectations, resulting in its share price surging 8% higher in after-hours trading. The company reported revenues of $170 billion in the fourth quarter, 14% higher than the $149.2 billion reported in the fourth quarter of 2022. The company reported EPS of $1.00 per share, beating market forecasts of $0.80, significantly exceeding reported EPS of $0.03 in the fourth quarter a year earlier.

"This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon," said Andy Jassy, Amazon CEO. "As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about."

Amazon projects robust sales growth and profitability in Q1 2024 guidance

 

original-size.webpSource: Amazon

Amazon's key financials

Slowing revenues

  • Current Quarter (Q1 2024): $142.53 billion
  • Previous Quarter (Q4 2023): $170.00 billion

EPS takes a dip

  • Diluted EPS Q1 2024: $0.83
  • Diluted EPS Q4 2023: $1.00

Amazon sales revenue

 

original-size.webpSource: TradingEconomics

Andy Jassy's vision for Amazon: what to watch for?

  • Amazon embraces the AI revolution

Jassy mentioned AI and Gen AI more than 30 times in his letter to shareholders earlier this month, noting that "Generative AI may be the largest technology transformation since the cloud – which itself is still in the early stages – and perhaps since the internet." As such, there will be keen interest in seeing how Amazon continues integrating and utilising AI technology within its business and product offerings and the potential it can create for shareholders.

  • Jassy's cost-cutting crusade

After overspending during the pandemic, Jassy is expected to continue cutting costs, specifically in the fulfilment and logistics division. "As we look toward 2024 (and beyond), we're not done lowering our cost to serve. We've challenged every closely held belief in our fulfilment network, and re-evaluated every part of it and found several areas where we believe we can lower costs even further while also delivering faster for customers."

  • Riding the AI wave: AWS's growth trajectory

Last quarter, revenue for the AWS segment increased by 13% year-on-year. There will be keen interest in seeing that rate of growth maintained in this AI-heavy area of Amazon as more businesses shift their data storage to the cloud.

  • Prime video and sports: the advertising goldmine

Amazon's Advertising revenue increased by 24% year over year in 2023 to $47 billion from $38 billion in 2022. Shareholders will look for continued strong growth in this area powered by various measures, including incorporating advertisements into Prime Video Shows and Movies and live sports.

  • The rise and fall of Amazon's cashier-less dream

Amazon's cashier-less technology, designed to help shoppers skip the line, was intended to reshape the future of retail. However, shoppers appeared uncomfortable using the technology. While Amazon has announced that they are walking back the technology, there will be interest in seeing what plans the company has for the technology already developed.

Amazon's 2023 letter to shareholders

 

original-size.webpSource: Amazon

Amazon technical analysis

In a move that took almost three years to complete, Amazon's share price recently reached a new all-time high after dropping more than 55% from its July 2021 high of $188.65. Amazon's ascent to new highs was driven by an 18% increase in the share price during the first quarter of 2024 - a performance that exceeded the tech-heavy Nasdaq, which saw a more modest 8.50% rise during the same timeframe.

Amazon weekly chart

 

original-size.webpSource: TradingView

The daily chart below illustrates that after an 8% jump in early February (following its Q4 2023 earnings report), Amazon's share price recently surged to new highs, propelled by a bullish trend channel. Looking ahead, bullish trend channel resistance lies at around $192, which would be a logical spot for profit-taking type sell orders. On the downside, initial support is identified at $170, where we would expect dip buyers to step in, ahead of more significant support at the lower boundary of the trend channel, coming in at around $148.00.

Amazon daily chart

 

original-size.webpSource: TradingView

 

  • Source TradingView. The figures stated are as of 17 April 2024. 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 Australia Pty Ltd. 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.

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