Amazon’s stock (NASDAQ: AMZN), has fallen by 3.8% in the last week to $3285 currently. In comparison, Trefis’ analysis of Amazon’s valuation is $4257, which implies an upside potential of more than 27%. Meanwhile, the S&P 500 declined by 3.2% in the same period. In a recently held event Amazon announced technology ranging from Smart thermostats, Robot companions, and Flying security cameras.
But will the company’s stock continue to decline over the coming weeks, or is a rise in the stock imminent? Based on trends in the company’s stock price over the last 10 years, the Trefis Machine Learning Engine finds average returns for AMZN stock to be around 3.1% in the next one-month (twenty-one trading days) period after experiencing a 3.8% fall in a week (five trading days).
According to the Trefis Machine Learning Engine, Amazon stock price forecast for a month from now is around $3390 – up 3.2% from its current market price of roughly $3285. But how would these numbers change if you are interested in holding Amazon’s stock for a shorter or a longer time period? You can test the answer and many other combinations on the interactive dashboard. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!
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Also, you can understand how Amazon‘s revenues have changed over the years along with trends in revenues for its closest peers in a separate dashboard analysis.
MACHINE LEARNING ENGINE – try it yourself:
IF AMZN stock moved by -5% over five trading days, THEN over the next twenty-one trading days, AMZN stock moves an average of 3.2% with a 62.2% probability of a positive return over this period.
Some Fun Scenarios, FAQs & Making Sense of Amazon Stock Movements:
Question 1: Is the price forecast for Amazon stock higher after a drop?
Consider two situations,
Case 1: Amazon stock drops by -5% or more in a week
Case 2: Amazon stock rises by 5% or more in a week
Is the price forecast for Amazon stock higher over the subsequent month after Case 1 or Case 2?
AMZN stock fares better after Case 1, with an expected return of 3.2% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an expected return of 2.1% for Case 2. This implies a price forecast of $3,391 in Case 1 and a figure of $3,353 in Case 2 using AMZN market price of $3285 on 10/1/2021.
In comparison, the S&P 500 has an expected return of 3.1% over the next 21 trading days under Case 1, and an expected return of just 0.5% for Case 2 as detailed in our dashboard that details the expected return for the S&P 500 after a rise or drop.
Try the Trefis machine learning engine above to see for yourself how the forecast for Amazon stock is likely to change after any specific gain or loss over a period.
Question 2: Does patience pay?
If you buy and hold Amazon stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.
Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!
For AMZN stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:
You can try the engine to see what this table looks like for Amazon after a larger loss over the last week, month, or quarter.
Question 3: What about the stock price forecast after a rise if you wait for a while?
The expected return after a rise is understandably lower than after a drop as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although AMZN stock appears to be an exception to this general observation.
AMZN’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:
It’s pretty powerful to test the trend for yourself for Amazon stock by changing the inputs in the charts above.
While Amazon stock is likely to move higher in the near term, there are several peers in its sector that look like a Better Bet Than AMZN stock. Also, Amazon Peer Comparisons summarizes how the company fares against peers on metrics that matter.