Buy, Sell, or Hold Amazon Stock After Q4 Earnings?

There was much anticipation for Amazon’s AMZN Q4 results last Thursday as the e-commerce giant had previously disclosed it saw a record holiday shopping season.While Amazon surpassed Q4 top and bottom line expectations, the company’s guidance was underwhelming to many on Wall Street. That said, let’s see if it’s time to buy, sell, or hold Amazon stock.    Amazon’s Q4 ResultsAmazon’s Q4 sales rose 10% year over year to $187.79 billion and topped estimates of $187.27 billion. Staying ahead of Alphabet GOOGL and Microsoft MSFT as the largest cloud provider, Amazon Web Services (AWS) attributed to 16% of Amazon’s top line at $28.78 billion. AWS segment sales increased from $24.2 billion in the prior period despite slightly missing estimates of $28.83 billion.Net income increased from $10.6 billion in the comparative quarter to $20 billion or $1.86 per share, an 84% spike from Q4 EPS of $1.01 a year ago. Crushing Q4 EPS expectations of $1.52, Amazon has now surpassed earnings expectations for nine consecutive quarters and has topped sales estimates in three of its last four quarterly reports.Image Source: Zacks Investment Research Amazon’s Full-Year Results Rounding out fiscal 2024, Amazon’s total sales were up 11% to $637.96 billion compared to $574.78 billion in 2023. More impressive, annual earnings soared 95% to $5.53 per share from EPS of $2.84 in 2023.Image Source: Zacks Investment Research Amazon’s Underwhelming Guidance Offering revenue guidance for the first quarter, Amazon expects Q1 sales at $151-$155.5 billion which came in below many analyst expectations of $158 billion. Notably, the current Zacks Consensus has been revised down to $154.86 billion or 8% growth (Current Qtr below).  The lower sales forecast was attributed to unfavorable foreign exchange rates with Amazon expecting a $2.1 billion impact in correlation with a stronger U.S. dollar.However, Wall Street also soured at Amazon’s increased spending which will be primarily aimed at building out AI data centers. Although Amazon’s diverse business operations are in prime position to be lucratively enhanced by AI, the company expects its capital expenditures to balloon to $100 billion this year from $83 billion in 2024.Image Source: Zacks Investment Research Monitoring Amazon’s Balance SheetWhat may ease investors' concerns in regard to Amazon’s increased spending is a strong balance sheet. To that point, Amazon currently has $101.2 billion in cash & equivalents. It’s also noteworthy that Amazon’s total assets of $624.89 billion is still nicely above its total liabilities of $338.92 billion.  Image Source: Zacks Investment Research Bottom Line For now, Amazon stock lands a Zacks Rank #3 (Hold). Remaining a cash cow, Amazon’s plan to build out its AI infrastructure could be warranted for future growth but better buying opportunities may be ahead.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks