When the founder of a famous company intends to sell a boatload of shares, it’s big news. Yet, it doesn’t have to alter your Amazon (NASDAQ:AMZN) stock forecast, especially after a blockbuster quarter for the company. When all is said and done, it still makes sense to invest in Amazon for the long term.
There’s been a lot going on with Amazon lately. Just for starters, Amazon just debuted an artificial intelligence powered shopping-assistant chatbot called Rufus.
That’s not the only reason to consider buying Amazon stock. As we’ll discover, Amazon’s financial results add up to a powerful bull case, yet. I should first discuss a large-scale share sale that will undoubtedly turn some heads on Wall Street.
Founder Discloses Plans to Sell AMZN Stock
Here’s the scoop. Reportedly, Amazon founder Jeff Bezos disclosed in a filing to the Securities and Exchange Commission that he plans to “sell up to” 50 million shares of Amazon stock “over a period ending on” Jan. 31, 2025.
There’s no way to know what 50 million Amazon shares will be worth in 2025, but they were collectively valued at roughly $8.6 billion recently. So, should this disclosure prompt retail investors to dump their AMZN stock today?
Don’t hit that “sell” button just yet. The SEC filing doesn’t indicate why Bezos might sell up to 50 million Amazon shares. It’s probably not an sign that Bezos doesn’t believe in the company he founded.
It’s entirely possible that Bezos just want to take some profits on his investment in Amazon. Could you blame him for cashing in some of his chips after AMZN stock’s astounding multi-year rally? In any case, be sure to look at Amazon’s terrific quarterly results before making any hasty moves.
Amazon Shines With Excellent Ad-Revenue Growth
Now’s a great time to delve into Amazon’s outstanding fourth-quarter 2023 results. Perhaps the main highlight of the quarter was Amazon’s net advertising-services sales, which grew 27% year over year to $14.654 billion. This figure beat Wall Street’s call for $14 billion in quarterly ad revenue.
Looking at the bigger picture, Amazon reported Q4 2023 net sales of $169.961 billion, up 14% YOY. This result came in ahead of Amazon’s previously forecasted net-sales range of $160 billion to $167 billion.
Amazon earned $1 per share during the quarter, beating the analysts’ consensus estimate of 79 cents per share. On top of all that, Amazon’s operating income increased substantially, from $2.7 billion in 2022’s fourth quarter to $13.2 billion in the fourth quarter of 2023.
Amazon Stock Forecast: Brace Yourself for Awesome Momentum
Global X analyst Mayuranki De remarked that Amazon’s “advertising services segment is gaining momentum.” I tend to agree, as Amazon’s aforementioned ad-revenue growth supports De’s point.
Besides, Amazon’s quarterly earnings beat should quell any investor’s concerns about the company’s financial health. Therefore, even if Bezos might intend to engage in some profit-taking this year, my AMZN stock forecast still indicates that significantly higher prices are coming.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
