Amazon.com (NASDAQ:AMZN) has successfully played out its role to draw in bigger clients over the last six years at its cloud computing arm. Though this could sound overstated to the average Amazon user, it is likely that investors holding AMZN stock are watching this closely.
The e-commerce giant’s cloud computing business isn’t just a random tidbit, but the cash cow that helps lift the company’s growth.
Subsequently, without “Amazon Web Services”, the valuation of the company could be disappointing, and with the paid off gambit, it has sent a good news for the company. Shares of Amazon had scored high-profile clients such as General Electric Company and Netflix Inc, along with a signing of partnerships with Salesforce.com Inc.
Even though the successful Amazon Web Services was initially driven from startups, corporate clients have represented huge paydays. However, the only given risk is that the bigger the institution, the slower it is to adapt, citing 5%-10% of corporate workbooks are in the cloud and is widely anticipated to expand in the next years.
In addition, companies like Amazon, IBM, Microsoft, and Google witnessed this shift years ago, as they have started competing for big contracts, although through various avenues.
What’s Weighing in on Amazon Stock?
Despite Amazon’s best Cyber Monday sales traffic in the history, both the company and shares still took a hit as investors remained wary over the company’s large discounts.
Thus, Amazon stock had a disappointing November, which declined by about 1.5%, down by three percent on Wednesday’s close since the start of the month. Hearing this, Citigroup Inc analysts downgraded their price objective and cited the company’s discounts in order to tightly compete in the holiday shopping season.
As Amazon stock continues to post skyrocketing revenue, the company has slightly seen a profitability hangup. In the years of 2012 and 2014, Amazon was in the red, and with this year, it is hardly seen that the company could become stable in terms of earnings.
Considering the technology as one of the most profitable and fastest-growing S&P 500 sectors, it still tends to be reasonably expensive.
Moreover, investors remained wary about how President Trump’s policies could give a huge impact on the largest players like Facebook, Amazon, Netflix and Google, after these companies have sold off in the wake of the election.
DoubleLine CEO Jeffrey Gundlach advised investors “to stay away from these things in a big way.”
Current Stance of Amazon.com Stock
The chart below illustrates Amazon.com stock’s movement ahead of its recent Cyber Monday during the holiday shopping season.
Given a bearish tone on the stock, it is shown here that the stock posted seven straight declines until today’s close, which almost tested support at 741.58 in a light trading volume.
Conclusion
As shares of Amazon.com are currently in a bearish tone, market players are recommended to wait on the sidelines as there aren’t any supporting candles present in today’s close.