Amazon Enters Correction Zone: Time to Panic or Be Brave?

Core Insights - Amazon.com Inc reported strong earnings with revenue growth in double digits year-over-year and earnings per share exceeding expectations by 25% [2][3] - Despite positive earnings, the stock experienced a 10% drop following a significant 45% rally, indicating potential profit-taking by investors [1][2] - Analysts remain bullish on Amazon, with firms like Goldman Sachs and Cowen reiterating positive outlooks and BMO Capital Markets raising the price target to $280 [4][5] Financial Performance - Revenue growth surpassed Wall Street forecasts, indicating robust demand, particularly in the AWS segment, which continues to show growth in cloud services [2][3] - The cautious guidance for operating income from management has raised concerns among investors, contributing to the stock's decline [3] Market Sentiment - The stock's recent correction of 10% is viewed as a healthy reset rather than a full reversal, with analysts suggesting that the long-term growth potential remains intact [6][12] - The absence of dip-buyers during the stock's sell-off suggests that institutional investors may be waiting for consolidation before reinvesting [9][10] Technical Analysis - Amazon's stock is currently trading around a support level of $210, which could serve as a prime entry point if it holds [7] - The relative strength index is in the mid-30s, indicating that the stock is approaching oversold territory [6] Analyst Ratings - The 12-month stock price forecast for Amazon is $262.45, suggesting a potential upside of 21.96% from the current price of $215.20 [8][9] - Analysts maintain a Buy rating on Amazon, although some top-rated analysts are recommending alternative stocks as better buys [14]