Amazon's Strong Quarterly Results Drive Stock Surge

Amazon.com (AMZN) shares jumped early Friday after the e-commerce giant delivered a blowout quarterly earnings report amid strength in its retail business and growing demand for the cloud division’s artificial intelligence (AI) products. The stock price sits poised to break out from a rising wedge pattern, with key overhead resistance near the all-time high in play.

Amazon attributed a 14% year-over-year (YOY) jump in fourth quarter revenue to a bumper holiday shopping season and the company’s October Prime Day event. “This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon,” CEO Andy Jassy said in a statement accompanying the quarterly results.

During the earnings call, Jassy said the company will take a cautious approach when considering new opportunities but plans to continue investing in new areas that resonate with customers while keeping an eye on efficiency. “We’re going to continue to invest in new things and new areas and things that are resonating with customers. Where we can find efficiencies and do more with less, we’re going to do that as well,” he explained.

On the AI front, Jassy said that while the company’s generative AI services are a relatively small business, they have the potential to generate tens of billions of dollars over the next few years. Furthermore, CFO Brian Olsavsky told analysts that interest in Amazon Web Services’ (AWS) generative AI products, such as Amazon Q and AI chatbot for businesses, had accelerated during the quarter. In September last year, Amazon said it plans to invest up to $4 billion in startup chatbot-maker Anthropic to take on cloud rivals in the AI arms race.

The AMZN share price has coiled within a rising wedge pattern on declining volume over the past five months, with an earnings-driven breakout likely in today’s trading session. If the stock continues to trend higher, it’s worth keeping an eye on the $188 level—an area on the chart where the price may encounter overhead resistance from a horizontal trendline connecting the July and November 2021 swing highs. However, a volume-backed breakout to a new all-time high (ATH) coinciding with the 50-day moving average crossing back above the 200-day moving averaging could mark the beginning of another leg higher for the e-commerce giant’s stock.

Amazon shares were up 7.1% at $170.56 about 45 minutes before the opening bell Friday.




In conclusion, Amazon's strong quarterly results, driven by growth in its retail business and AI products, have contributed to a surge in the company's stock price. The stock is poised for a potential breakout from a rising wedge pattern, with key overhead resistance near the all-time high. Investors should keep an eye on the $188 level and monitor the stock's volume and moving averages for further guidance on its potential trajectory.