Latest news with #AMZN
Yahoo
5 hours ago
- Business
- Yahoo
The Saturday Spread: Using Science to Pinpoint Empirically Enticing Trades in WMT, OKTA and RCAT
It's the one question that the financial publication industry consistently refuses to answer: how likely is it that the broadcasted thesis happened because of the signal or undervaluation and not just by random chance? Pretty much all finpub articles offer an investment or trading idea; otherwise, what would be the point of reading the material? If there was no edge to be found, then you should simply put your money into the benchmark S&P 500 SPDR (SPY) and call it a day. But instead, the concept of reading financial analyses is to extract alpha — generating returns that exceed what you'd expect from passive exposure to a broader index. More News from Barchart Netflix Produces Strong Q2 FCF, But NFLX Stock Dips - Is It a Buy Here? AMZN Trade Idea: Capture Gains Without Chasing the Stock AMC Entertainment's Unusual Options Activity Sets Up for a Long Straddle. Should You Bite? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. But you can't just extract alpha without understanding what you are benchmarking against. And that's the point of the null hypothesis. In the financial realm, the null hypothesis is the assumption that there is no mispricing. Put another way, whether you read the finpub article in question or not, your performance will not deviate statistically from what is expected. By logical deduction, our job as analysts is to reject the null; specifically, that the alternative hypothesis that we present is not just a materialization of random noise but an empirically meaningful signal. To determine this meaningfulness, analysts should run a binomial test, which helps narrow down truly interesting ideas from typical price discovery chaos. However, looking at share prices or their derivatives for recurring patterns represents a gargantuan task. Instead, I prefer compressing (discretizing) price action into market breadth or sequences of accumulative and distributive sessions. By analyzing root demand, we can more easily pinpoint unusual quantitative signals — signals that can point to asymmetric opportunities. Yes, the emphasis on scientific methodologies is a financial red pill. But if we're going to beat the market, we have to think differently. Below are three ideas to mull over this coming week. Walmart (WMT) Let me be blunt: big-box retailer Walmart (WMT) is a truly boring idea. But even industry juggernauts can occasionally broadcast signals that make them very intriguing. For WMT stock, this signal is what I would abbreviate as the 6-4-D sequence: six up weeks, four down weeks, negative trajectory across the 10-week period. Since January 2019, this sequence has materialized 17 times. It's an odd pattern given that the balance of accumulative sessions outweighs distributive, yet the overall trajectory is negative. Still, what's most intriguing is that in 76.47% of cases, the following week's price action results in upside, with a median return of 1%. On Friday, WMT stock closed at $95.05, meaning that if the implications of the 6-4-D sequence pan out, it could hit $96 soon, perhaps in a week. Should the bulls maintain control of the market over the next three to four weeks, a push toward $96.55, perhaps even $97, may be on the cards based on past analogs. The null hypothesis in this case is the baseline probability of WMT stock assuming no unusual mispricing, which is 57.02%. However, the much higher probability of the 6-4-D sequence — which has an empirically intriguing p-value of 0.0819 (implying 91.81% confidence that the signal isn't random) — incentivizes a debit-based options strategy. With that in mind, aggressive speculators may consider the 95/97bull call spread expiring Aug. 8. Barchart Premier members can quickly pinpoint the most viable trades, thereby eliminating much of the guesswork involved in options trading. The above transaction involves buying the $95 call and simultaneously selling the $97 call, for a net debit paid of $93. Should WMT stock rise through the short strike price at expiration, the maximum reward stands at $107, a payout of 115%. Okta (OKTA) Another intriguing idea that popped on the quantitative radar is Oka (OKTA), an identity and access management company. While OKTA stock has been a strong performer, gaining over 21% on a year-to-date basis, it has also been a choppy name. For example, in the trailing month, the security is down 4%. Still, this may open up a trading opportunity. In the past two months, OKTA stock has printed a 4-6-D sequence: four up weeks, six down weeks, negative trajectory. Since January 2019, this particular sequence has occurred 37 times. Ordinarily, it would be associated with pessimism given the greater balance of distributive sessions, along with the negative trajectory. However, in 64.86% of cases, the following week's price action results in upside, with a median return of 4.93%. Should the bulls maintain control for the next three weeks, investors may see an added performance boost of 2.06%. With OKTA closing at $95.43 on Friday, it could potentially be on pace to exceed $102 over the next few weeks. Here, the null hypothesis is a baseline probability of 52.63%. Further, the 4-6-D sequence runs a p-value of only 0.0917. All things considered, the framework incentivizes a debit-based strategy. With that said, speculators may consider the 97.50/100 bull call spread expiring Aug. 15. This trade requires a net debit of $96, with a gargantuan payout of over 160%. Red Cat (RCAT) Defense contractor Red Cat (RCAT) — which specializes in advanced solutions such as reconnaissance drones — is fundamentally intriguing for obvious reasons if you've been keeping pace with geopolitical news. However, it's also risky. RCAT stock is down more than 12% YTD and that's including the 30% lift in the trailing five sessions. If choppiness isn't your thing, you may want to look elsewhere. Here's the thing, though. In the past two months, RCAT stock has printed a 6-4-U sequence: six up weeks, four down weeks, positive trajectory. Since January 2019, this sequence has materialized 44 times. With RCAT, the higher balance of accumulative sessions tends to attract more bullish behavior. Therefore, in 56.82% of cases, the following week's price action results in upside, with a median return of 9.31%. On the surface, that might not seem like a significant edge. However, RCAT's null hypothesis is a baseline probability of 45.32%. Given that the security natively features a negative bias, it's enticing that the 6-4-U sequence tilts the odds firmly in the bulls' favor. This signal has a p-value of 0.1398, which is higher than the rest. However, given the open-system nature of the stock market, it's arguably empirically intriguing. Those who really want to swing for the fences may consider the 11/12 bull call spread expiring Aug. 15. This trade requires a net debit of $40, with a max payout of 150%. On the date of publication, Josh Enomoto did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 hours ago
- Business
- Yahoo
Jefferies Lifts Amazon (AMZN) Price Target to $265, Sees Revenue and Margin Upside
Inc. (NASDAQ:) is one of the . Jefferies reiterated the stock as 'Buy' and raised its price target on Amazon to $265 per share from $255. The firm is confident that Amazon's revenues will stay strong and that profit margins will improve in the second quarter. 'We see resilient revs and potential margin upside in Q2.' In other news, BofA Securities analysts removed Amazon (AMZN) from its prestigious US 1 List on the same day. The US 1 List pinpoints the firm's top investment ideas. Despite being removed from the list, the financial institution has confirmed that the company will maintain its 'Buy' rating. The rating affirmation signifies that Amazon is still a strong contender in the market. Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. While we acknowledge the potential of AMZN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None.
Business Insider
13 hours ago
- Business
- Business Insider
Amazon Stock (NASDAQ:AMZN) Perks Up With Greater Sustainability Push
An operation like online retail giant Amazon (AMZN) is energy-intensive. There is simply no other way to put it. Between the legions of delivery vehicles bringing our ordered products to our doorsteps and the massive energy expenditures of data centers and the like, Amazon burns a lot of power. But Amazon is also working to reduce its power needs, and focus on sustainability, a process that is garnering it some respect. Sufficient respect, in fact, to push up Amazon stock fractionally in Friday afternoon's trading. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Amazon ships somewhere around a thousand packages a minute worldwide, reports note. And while there have been significant gains in its emissions patterns, Amazon has also been making headway with its Environmental, Social and Governance (ESG) scales. Word from Amazon's Chief Sustainability Officer Kara Hurst notes that Amazon's pathway to being more sustainable will 'never be linear,' but progress is being made regardless. Amazon still has a goal to reach net-zero status by 2040, even as its total numbers are on the rise, up from 64.38 million tonnes of CO2 equivalent (MTCO2e) in 2023 to 68.25 million in 2024. But it did meet its goal of matching 100% of the electricity used with renewable energy, and has done so for the last two years. Amazon will never stop pulling power, but it can at least improve how much of that power comes from certain sources. New Leader for the Earth Fund In a bid to further improve things, Jeff Bezos recently tapped a new leader for the Bezos Earth Fund. A 'climate and biodiversity fund' valued at $10 billion, the fund will be run by the former head of the Alexa voice division, Tom Taylor. Taylor retired from Amazon after 23 years, back in 2022, and will now be president and CEO of the Bezos Earth Fund. Taylor noted that he was 'thrilled' to join the fund, planning to '…lead with the bold mandate to invent our way out of Earth's environmental challenges with a combination of long-term thinking, technical curiosity, and excellent execution.' Is Amazon a Good Long-Term Investment? Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 44 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 22.25% rally in its share price over the past year, the average AMZN price target of $251.44 per share implies 11.28% upside potential.
Yahoo
a day ago
- Business
- Yahoo
Amazon.com Earnings Preview: What to Expect
Seattle, Washington-based Inc. (AMZN) is one of the world's largest e-commerce companies, offering retail sales of consumer products, advertising services, and subscriptions. Valued at a market cap of $2.4 trillion, the company also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Echo, Ring, Blink, and Eero. It is scheduled to announce its fiscal Q2 earnings for 2025 after the market closes on Thursday, Jul. 31. Before this event, analysts project this e-commerce giant to report a profit of $1.32 per share, up 7.3% from $1.23 per share in the year-ago quarter. The company has a solid trajectory of consistently beating Wall Street's bottom-line estimates in each of the last four quarters. Its earnings of $1.59 per share in the previous quarter topped the consensus estimates by 17.8%. More News from Barchart Insider Trading Alert: Here's Who Bought Nvidia and AMD Stock Before the U.S. Chip Deal with China Dear Tesla Stock Fans, Mark Your Calendars for July 23 Robinhood Keeps Hitting New Highs. How Should You Play HOOD Stock Here? Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! For the full year, analysts expect AMZN to report EPS of $6.27, up 13.4% from $5.53 in fiscal 2024. Its EPS is expected to further grow 15.8% year-over-year to $7.26 in fiscal 2026. Shares of AMZN have rallied 19.1% over the past 52 weeks, outpacing both the S&P 500 Index's ($SPX) 12.7% uptick and the Consumer Discretionary Select Sector SPDR Fund's (XLY) 15% return over the same time frame. On May 1, released its Q1 results, and its shares plunged marginally in the following trading session. The company's revenue increased 8.6% year over year to $155.7 billion, marginally surpassing analyst expectations. Moreover, its net income of $1.59 per share grew 62.2% from the same period last year and came in 17.8% above the consensus estimates. Strong growth across all its reportable segments aided the results. Wall Street analysts are highly optimistic about Amazon's stock, with an overall "Strong Buy" rating. Among 54 analysts covering the stock, 47 recommend "Strong Buy," six indicate "Moderate Buy," and one suggests a "Hold' rating. The mean price target for AMZN is $249.68, implying an 11.5% potential upside from the current levels. On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
AMZN Trade Idea: Capture Gains Without Chasing the Stock
Amazon's (AMZN) most recent earnings report for Q1 2025 showed strong performance, with earnings per share (EPS) of $1.59, beating analysts' expectations of $1.38. Revenue rose 8.6% year-over-year to $155.67 billion, also surpassing forecasts. More News from Barchart Insider Trading Alert: Here's Who Bought Nvidia and AMD Stock Before the U.S. Chip Deal with China 3 Unusually Active Cash-Secured Puts in Quality Companies for Attractive Income Wall Street Does Not Want You to Take This 'Red Pill' on Albertsons Companies (ACI) Stock Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! The company's cloud division, AWS, continued to be a major profit driver, while retail and advertising segments showed steady growth. Amazon's stock has shown solid momentum recently, trading around $225 per share as of mid-July 2025. Over the past three months, it's surged by 29%, driven by optimism around its AI initiatives and strong cloud growth. Today, we're looking at a calendar spread on Amazon stock. Calendar spreads are an option trade that involves selling a short-term option and buying a longer-term option with the same strike. Traders can use calls or puts and they can be set up to be neutral, bullish or bearish with neutral being the most common. When doing bullish calendar spreads, we typically use calls to minimize the assignment risk. Likewise, if the calendar is set up with a bearish bias, we use puts. Neutral calendars can use calls or puts, but calls are more common. Let's look at an example using Amazon. Amazon Calendar Spread Example With Amazon stock trading around $225, setting up a calendar spread at $225 gives the trade a neutral outlook. Selling the August 15 call option with a strike price of $225 will generate around $855 in premium, and buying the September 19, $920 call will cost approximately $1,150. That results in a net cost for the trade of $295 per spread, and that is the most the trade can lose. The estimated maximum profit is $580, but that could vary depending on changes in implied volatility. The idea with the trade is that if AMZN stock remains around $225 for the next few weeks, the sold option will decay faster than the bought option allowing the trade to be closed for a profit. The breakeven prices for the trade are estimated at around $210 and $245, but these can also change slightly depending on changes in implied volatility. In terms of trade management if AMZN broke through either $210 or $245, I would look to adjust or close the trade. Below is the payoff graph with the blue line representing the profit or loss at expiration and the purple line being the trade as of today. Amazon Company Details is one of the largest e-commerce providers, with sprawling operations spreading across the globe. Its online retail business revolves around the Prime program well-supported by the company's massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish footprint in physical grocery supermarket space. Amazon also enjoys dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services, which is one of its high-margin generating businesses. Amazon has also become a household name with its Alexa powered Echo devices. Artificial Intelligence backed Alexa is helping the company sell products and services. The company reports revenue under three broad heads' North America, International and AWS, respectively. Amazon targets three categories of customers - consumers, sellers and website developers. Mitigating Risk Thankfully, calendar spreads are risk defined trades, so they have some build in risk management. Position sizing is crucial to ensure that minimal damage is done if the trade suffers a full loss. One way to set a stop loss for a calendar spread is close the trade if the loss is 20-30% of the premium paid. Please remember that options are risky, and investors can lose 100% of their investment. This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions. On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
