<p>Since going public in 1997, Amazon finally managed to reach a $1 trillion valuation in 2018. While the company’s stock price has struggled at different times in its history, it still amounts to a dizzying 80,000% share price growth. Much of this growth is down to its founder, Jeff Bezos.</p><p><em><a href=”https://admiralmarkets.com/analytics/traders-blog/amazon-billion-dollar-failures”><img style=”width:auto;” class=”img-responsive” src=”https://fxmedia.s3.amazonaws.com/articles/remote/5459a2922c4b6a92ccdbdf487182d760.png”></a></em></p><p>Bezos’ annual letter to shareholders is high on the reading list of every investor. And, after releasing the letter in early April, it has investors on high alert. In this article, we explore the contents, the impact on its share price and the possible trading opportunities for Amazon stock. </p><p><br></p><h2>Jeff Bezos’ Multi-Billion Dollar Warning</h2><p>”Amazon will be experimenting at the right scale for a company of our size if we occasionally have multi-billion dollar failures,” Bezos said in his annual shareholder letter. “We will work hard to make them good bets, but not all good bets will ultimately pay out.”</p><p>For most investors, having the CEO of a trillion-dollar company talk about having multi-billion dollar failures may be cause for concern. However, Bezos is no ordinary CEO. After founding Amazon as an online bookstore in 1994, Bezos has built Amazon’s revenue stream from a multitude of places such as Amazon Studios, Amazon Electronics, Amazon Grocery, Amazon Cloud (AWS), a raft of artificial intelligence products and government contracts, and their world famous Amazon.com e-commerce site. </p><p>Of course, Bezos also sustained a positive attitude in his letter, rather than just warning signs, stating that: “The good news for shareowners is that a single big winning bet can more than cover the cost of many losers.” Sage advice for many traders! But where will this big winning bet come from? Will it be Amazon’s foray into the $3 trillion a year health care market? Internet deliveries from outer space? Only time will tell, but analysing Amazon’s share price and viewing analyst expectations could give us a headstart. </p><p><br></p><h2>What Do Amazon’s Analyst Expectations Suggest?</h2><p>Out of 45 <a href=”https://markets.businessinsider.com/analyst/amzn”>surveyed</a> brokers and investment banks, 40 have a buy rating on the stock and five have an ‘overweight’ rating. In fact, many investment banks such as RBC Capital Markets, Deutsche Bank and the Credit Suisse Group, initiated their buy ratings this year. Of course, this never means the stock price will just go up – but it does show that these big investors feel positive about the fundamentals of the company. </p><p>In fact, out of these surveyed brokers and investment banks, the average price target for the stock is $2,128, with the highest target at $2,450 and the lowest target at $1,850. While these are merely just the opinions of different analysts, the figures represent some possible upside in Amazon’s share price from its current level. What does the chart tell us?</p><p><br></p><h2>Trading Amazon Stock CFDs</h2><p>The long-term price chart of Amazon, shows a clear trend higher, as shown below:</p><p><a href=”https://admiralmarkets.com/analytics/traders-blog/amazon-billion-dollar-failures”><img style=”width:auto;” class=”img-responsive” src=”https://fxmedia.s3.amazonaws.com/articles/remote/4197a050bb5502a8b8978e7189921686.png”></a></p><p><em>Source: Admiral Markets </em><a href=”https://admiralmarkets.com/trading-platforms/metatrader-se”><em>MT5 Supreme Edition</em></a><em>, </em><a href=”https://admiralmarkets.com/start-trading/contract-specifications/instrument/amzn”><em>AMZN</em></a><em>, Weekly – Data range: from April 10, 2011, to April 15, 2019, accessed on April 15, 2019, at 11:28 pm BST. – Please note: Past performance is not a reliable indicator of future results.</em></p><p><em><br></em></p><p>Zooming in to more recent price action on the daily chart and it is clear there is some upside left before the median price target for different analysts of $2,128, as shown below:</p><p><a href=”https://admiralmarkets.com/analytics/traders-blog/amazon-billion-dollar-failures”><img style=”width:auto;” class=”img-responsive” src=”https://fxmedia.s3.amazonaws.com/articles/remote/f089c590d01e37b1a8e5650f2fa752ea.png”></a></p><p><em>Source: Admiral Markets MT5 Supreme Edition, AMZN, Weekly – Data range: from November 15, 2017, to April 15, 2019, accessed on April 15, 2019, at 11:33 pm BST. – Please note: Past performance is not a reliable indicator of future results.</em></p><p><em><br></em></p><p>This type of analysis can be useful for traders in choosing a directional bias on the stock. As recent price action shows, markets do not just move in a straight line. Therefore, traders will often use technical analysis tools and indicators to help identify possible entry and stop loss levels that provide low-risk buying opportunities. You can learn more about online stock trading strategies for this year in <a href=”https://admiralmarkets.com/education/articles/forex-strategy/forex-cfd-markets”>’Forex & CFD Markets 2019′</a>. </p><p>One of the best ways to test your strategies, trading tools, theories or ideas is by using a <a href=”https://admiralmarkets.com/start-trading/forex-demo”>risk-free demo trading</a> account for the MetaTrader 5 platform so you can access global stocks, currencies and commodities starting today. </p><p><a href=”https://admiralmarkets.com/products/stocks”><a href=”https://admiralmarkets.com/analytics/traders-blog/amazon-billion-dollar-failures”><img style=”width:auto;” class=”img-responsive” src=”https://fxmedia.s3.amazonaws.com/articles/remote/3d8c10c3e40088590547fd874b07f4d3.png” style=”” alt=”Open a Trader’s ROom account and begin trading today!” rel=””></a></a></p><p><em>The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:</em></p><ol><li>The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation.</li><li>Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.</li><li>Each of the Analysis is prepared by an independent analyst (Jitan Solanki, Freelance Contributor) based on personal estimations.</li><li>To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.</li><li>Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.</li><li>The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.</li><li>Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.</li><li>The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.</li><li>Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the <a href=”https://admiralmarkets.com/risk-disclosure”>risks.</a></li></ol>
- Comments Off on Bezos Warns Of Amazon’s ‘Multi-Billion Dollar Failures’. What’s Next For The Stock?