3 Reasons Amazon Could Be at an All-Time High by October

Key Points

• Amazon continues to command strong analyst support with fresh price targets running up to $280.
• A dovish Fed and ongoing rate cut tailwinds make the macro backdrop highly favorable for tech names.
• Seasonal catalysts, including October’s Prime Big Deal Days, are also lining up in Amazon’s favor and should enable further gains. 

Shares of tech giant Amazon.com Inc NASDAQ: AMZN closed just above $230 on Wednesday evening, keeping intact the fresh uptrend that has been running since the start of August. While the broader market has been powering to fresh records, Amazon is still a few dollars shy of its own all-time high around the $240 mark, last touched in February. 

As we recently flagged, there’s a risk that Amazon’s chart is forming a dangerous-looking triple top, which makes the coming weeks critical for the stock and its prospects. If shares can prove the bears wrong and decisively break through this stubborn level of resistance, there is a clear path into new highs.

The good news for those of us on the sidelines is that there are several reasons to think this is going to happen. Let’s jump in and take a look.

Reason #1: Strong Analyst Conviction

Let’s start with what has been one of the constant tailwinds for Amazon in the past year: Wall Street’s bullish coverage. While the stock caught a rare downgrade last month, analysts’ stance on Amazon has only strengthened in recent weeks.

This week, the team at Truist Financial has already reiterated its Buy rating and boosted its price target up to $270.

That follows similar moves earlier in the month from both Jefferies and Morgan Stanley, who remain firmly in the bull camp. With updated targets now ranging as high as $280, there’s a solid consensus emerging that Amazon could easily rally another 20% from where it closed on Wednesday, which would put it well above February’s record close. 

That broad analyst conviction helps offset the downgrade from Zacks Research last month, which is looking more and more like a rare blip on what is otherwise a stellar track record of Buy and Overweight ratings.

For investors considering getting involved, the depth and consistency of analyst support here is one of the clearest signals that Amazon could be cruising into blue-sky territory soon. 

Reason #2: Macro Tailwinds From the Fed

Beyond the bullish analyst outlook, there’s the macro backdrop, which is growing increasingly supportive. With the Federal Reserve maintaining its dovish tone and cutting rates in Wednesday’s meeting, growth stocks like Amazon, primarily dependent on tech and consumer revenue, are in a prime position to benefit. 

The logic is straightforward: lower rates mean cheaper borrowing costs for Amazon, which directly supports profitability. They also encourage businesses to increase spending on technology, a tailwind for Amazon’s AWS business.

Consumers are more likely to open their wallets, which fuels Amazon’s core e-commerce engine. In practical terms, a rate cut signals a friendlier environment for stocks like Amazon, and it has historically performed well in these kinds of cycles. 

Reason #3: Seasonal Catalysts Approaching

A third reason to be optimistic is Amazon’s seasonal catalysts. The company just announced that its Prime Deal Days will start earlier than usual on Oct. 7, effectively bringing forward the start of the bumper holiday shopping season. 

Events like this have historically driven surges in consumer spending on the platform, which is why Q4 is such a critical quarter for revenue. 

Beyond Prime Deal Days, Amazon has historically seen strong share price momentum heading into the Christmas holidays. Last year, for example, it saw a 20% rally from the end of November into mid-December. It was a similar story in 2023 as well, and this seasonal dynamic adds to the case that any near-term breakout above $240 could snowball quickly. 

Investors will also be looking ahead to Amazon’s next earnings report, scheduled for the end of October. The company's most recent July results saw it once again beat expectations, and with that momentum still fresh, expectations are already building for another strong update. 

This expectation acts as a tailwind in itself, as investors open or add to positions ahead of the report in anticipation of a post-earnings pop. If this pre-earnings run-up starts to materialise before the end of September, it could easily help the stock rally to fresh highs beyond the $240 level.