Shares of Amazon.com, Inc. (NASDAQ: AMZN) have been having a standout year, with the stock building on the 150% rally that started in 2023. Though its shares have softened slightly in recent weeks, the tech titan was hitting fresh all-time highs just earlier this month. Even with this pullback, sentiment around Amazon remains strongly bullish, especially as it hovers near the key $200 level.

Headquartered in Seattle, Washington, Amazon boasts a market cap of $2 trillion and continues to dominate the e-commerce and cloud computing space. For those of us on the sidelines, this is a stock that’s worth watching closely. As analysts increase targets and markets rally, Amazon’s days near $200 may be numbered.

Amazon's Fundamental Performance

For starters, let’s look at the company’s fundamental performance. Amazon has consistently exceeded Wall Street’s expectations for nearly two years now, with its most recent earnings report in late October serving as a prime example. The company smashed expectations with its latest earnings report, delivering both earnings per share and revenue prints that were well ahead of the consensus.

Revenue grew by an impressive 11% year-over-year while operating income surged by a remarkable 56%. This robust performance highlights Amazon’s operational strength and positions the company well, heading into what is typically its strongest quarter of the year.

Moreover, the company continues to innovate and expand its reach. Amazon Web Services (AWS) remains a key growth driver, with double-digit revenue growth and expanding margins. As we head into the last couple of weeks of the year, these metrics signal that Amazon is firing on all cylinders.

Bullish Analyst Updates Reinforce Optimism for Amazon Stock

Multiple analysts are bullish on Amazon’s trajectory, and their overwhelming optimism is hard to ignore. The teams at Needham & Co., Loop Capital, Morgan Stanley, and Wedbush are just a few of the more than a dozen that have reiterated their Buy ratings this month alone.

Loop Capital’s price target of $275 is among the highest on the Street, and from where the stock closed on Monday, Nov. 25, it points to an upside target of nearly 40%. Not bad for a $2 trillion giant. Analysts have been quick to applaud Amazon’s recent results, with many highlighting its improving profitability and strong cash flows as reasons to stay bullish.

Notably, no bullish rating from the past two months has a price target below $200, underscoring the widespread confidence that Amazon shares are set to continue rallying for the foreseeable future. 

Potential Concerns for Amazon: Rising Costs and Competition

While Amazon's outlook is overwhelmingly positive, it’s important to consider some potential risks. Rising competition in the e-commerce space and increasing costs could put pressure on margins, and for these reasons, Wells Fargo recently urged caution with an Equal Weight rating. 

Additionally, regulatory scrutiny remains a wildcard. Reports suggest Amazon could face a European Union antitrust investigation next year, with potential penalties looming. But again, these challenges are almost par for the course for tech titans, and based on recent price action, investors don’t seem overly concerned.

Getting Involved

From a technical perspective, it’s important to note that Amazon’s uptrend remains very much intact despite the stock falling by as much as 10% in the past fortnight. This was a good thing as it relieved some pressure on Amazon’s Relative Strength Index (RSI). This is currently sitting at 53, indicating plenty of room for the stock to start moving higher again before even coming close to entering overbought territory. 

Investors should look at further gains heading into the rest of the year, particularly with broader market conditions working in Amazon’s favor. The S&P 500 is flirting with all-time highs, and the Fed’s recent interest rate cuts are fueling a risk-on sentiment that should continue to benefit stocks like Amazon. Let’s see how the stock trades heading into Thanksgiving weekend; based on the current sentiment, don’t be surprised if it never trades below $200 again.