Amazon (AMZN) witnessed a remarkable performance as its stock recorded a sixth consecutive gain on Friday. This upward streak, which initiated on November 29, has seen the stock ascend in eight out of the past nine sessions. Consequently, the world’s leading e-commerce behemoth has augmented its market capitalization by a staggering 14.1%, amounting to nearly $300 billion.
At the market close, Amazon stock soared 2.94% to reach $227.03, concluding the trading day near its peak and establishing a new all-time high.
The Dow Jones Industrial Average (DJIA), of which Amazon is a constituent, experienced a marginal dip. This was primarily due to the ongoing sell-off of UnitedHealth Group (UNH) subsequent to the tragic incident involving one of its top executives on Wednesday. UNH stock plummeted by as much as 5% during the session. In contrast, the market was abuzz with enthusiasm following the November Nonfarm Payrolls figure, which surpassed expectations at 227K. The DJIA ultimately closed 0.28% lower.
The impetus behind Amazon’s price rally appears to be multifaceted. The stock has been on an upward trajectory since at least August 5 and has exhibited a long-term uptrend since December 2022.
Last week’s revelation of Amazon’s development of the second version of its AI-infused data center chip, Trainium2, has been a significant highlight. Developed in-house by Annapurna Labs, this processor is purported to be four times swifter than its predecessor.
On Wednesday, Apple (AAPL) announced the anticipation of up to 50% efficiency enhancements by leveraging the Trainium2 chip for training certain AI models. Additionally, AWS’ Inferentia and Graviton chips have been utilized in Apple’s search widgets.
Amazon Web Services has also forged new alliances with PagerDuty (PD) and GitLab (GTLB) for AI product training.
The holiday season has further bolstered Amazon’s prospects. Black Friday and Cyber Monday sales figures have attested to the robust spending by US consumers. Adobe Analytics estimated that consumers shelled out $13.3 billion on Cyber Monday, a 7.3% increase from 2023. Black Friday sales also exceeded $10.8 billion, with Amazon doubtless reaping a substantial share of this expenditure.
However, not all news has been favorable. It emerged on Wednesday that JPMorgan (JPM) and AT&T (T) have suspended their advertising on Amazon’s Twitch streaming platform in response to complaints regarding the promotion of “antisemitic” content.
From a chart perspective, Amazon stock stands out as one of the healthiest among the Magnificent 7 as 2024 nears its conclusion. Year-to-date, shares have surged 49%, while Nvidia (NVDA) has remained relatively stagnant post-earnings release.
The support level is approximately in the $196 – $197 range, where the 50-day Simple Moving Average (SMA) converges with the pullback witnessed on November 20th and 21st.
Given the numerous consecutive up days, a period of consolidation might be anticipated. Nevertheless, the Relative Strength Index (RSI) is only at 73, just marginally in overbought territory. Any potential pullback may not extend beyond the prior November range high near $215.
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