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SUMMARY
Parkev Tatevosian, CFA, analyzes Amazon's latest quarterly results, highlighting the company's revenue and operating income exceeding guidance despite challenging macroeconomic conditions. He discusses the stock's recent performance, valuation adjustments, and his continued positive outlook for Amazon as a top investment pick.
MAIN POINTS
- Amazon, along with Meta, Microsoft, and Alphabet, reported quarterly results on April 29th, 2026, with most stocks declining.
- Amazon reported $181.5 billion in revenue for the quarter, surpassing its own guidance and achieving 17% year-over-year growth.
- Despite macroeconomic headwinds such as the war in Iraq and rising oil prices, Amazon's revenue and operating income both exceeded expectations.
- Amazon's stock price fell slightly after earnings due to a prior 29% rally, as optimism had already been factored into the share price.
- Tatevosian raised his fair value estimate for Amazon to $301 per share, citing improved free cash flow projections and capital structure adjustments.
- With Amazon trading at $260, Tatevosian considers the stock undervalued and ranks it among his top 15 investment picks.
DETAILED ANALYSIS
On April 29th, 2026, Amazon released its quarterly financial results alongside other major technology firms, drawing significant attention from investors. Despite a generally negative market reaction to the tech sector's earnings, Amazon reported standout figures, with revenue reaching $181.5 billion for the quarter, representing a 17% increase year-over-year. This performance notably exceeded the company's own guidance, which had projected revenue growth between 11% and 15%, and was particularly impressive given the onset of war in Iraq, which contributed to higher oil prices and reduced consumer disposable income.
Amazon's operating income also surpassed expectations, coming in at $23.9 billion, well above the upper end of the company's forecasted range of $16.5 billion to $21.5 billion. Despite these strong results, Amazon's stock price declined by about 1.25% following the announcement. This reaction was attributed to a substantial rally in Amazon shares during the preceding month, driven by optimism after a ceasefire announcement in March, which had already pushed the stock up by over 29%.
As a result, much of the positive news was considered to be priced in ahead of the earnings release.
In light of the robust financial performance, Parkev Tatevosian revised his fair value estimate for Amazon upward from $250 to $301 per share. This adjustment was based on updated projections for the company's future free cash flow and changes in its capital structure, which improved the weighted average cost of capital. With Amazon's market price at $260 per share at the time of analysis, the stock appeared undervalued relative to Tatevosian's intrinsic value calculation.
He reaffirmed his positive outlook on Amazon, ranking it among his top 15 stocks to buy and emphasizing the company's high quality and attractive valuation.
LINKS
- YouTube channel membership page for exclusive perks and access.
- Special offer for The Motley Fool Stock Advisor.
- Purchase Parkev Tatevosian's book on stock investing.
- Fiscal.ai investment research tool with a discount for viewers.
- Subscribe to Parkev Tatevosian's free monthly newsletter on Substack.