Why Amazon (AMZN) is a Top Momentum Stock for the Long-Term

Zacks Investment Research highlights its Style Scores (Value, Growth, Momentum, and VGM) as crucial complements to its proprietary Zacks Rank, guiding investors to prioritize stocks with strong Ranks and A/B Style Scores for enhanced outperformance potential. Amazon (AMZN) is presented as a top momentum stock, holding an 'A' Momentum and VGM score despite its #3 (Hold) Zacks Rank. This assessment is underpinned by AMZN's 4.4% share price increase over four weeks, recent upward revisions of its FY2025 earnings estimates by $0.05 to $6.23 per share from four analysts, and a consistent 20.7% average earnings surprise, positioning it as a compelling consideration for momentum-focused investors.

Analysis

Amazon (AMZN) is presented with strong momentum indicators despite its neutral Zacks #3 (Hold) rating. The stock scores an 'A' for both its Momentum Style Score and its overall VGM (Value, Growth, Momentum) score, signaling positive characteristics for certain investment strategies. This momentum thesis is supported by tangible metrics, including a 4.4% share price increase over the past four weeks and a consistent history of outperformance, evidenced by an average earnings surprise of +20.7%. Fundamentally, the outlook is buttressed by positive analyst sentiment, with four analysts revising their fiscal year 2025 earnings estimates upward in the last 60 days. This has lifted the Zacks Consensus Estimate for FY2025 EPS by $0.05 to $6.23 per share, suggesting that the recent price appreciation is backed by improving earnings expectations.

Key Decisions for Investors

• Momentum-oriented investors should note AMZN's 'A' rating for momentum, which is supported by a 4.4% price gain in the last four weeks and upward revisions to FY2025 earnings estimates.
• It is crucial to weigh the strong momentum and VGM scores against the neutral Zacks #3 (Hold) rank, which may imply that significant upside catalysts are either limited or already reflected in the current valuation.
• Investors should monitor for continued positive earnings estimate revisions and sustained price strength, as these are the primary factors underpinning the current bullish momentum thesis.
• Given the history of a +20.7% average earnings surprise, positions should be managed with an awareness of potential volatility and upside around future earnings announcements.