Last week, the first FANG stock surged on a strong quarterly earnings report, and now some analysts are forecasting further upside for another member of the FANG quartet reporting this week: Amazon (NASDAQ:$AMZN). For those new to the market, a FANG stock represents the four highest performing technology stocks in the market- Facebook (NASDAQ:$FB), Amazon, Netflix (NASDAQ:$NFLX), and Google (NASDAQ:$GOOGL).
Netflix surpassed its earnings expectations and membership forecasts when it disclosed its earnings on July 17, thus pushing the stock to all-time highs. Amazon is in position to see a similar increase after its earnings report on Thursday, July 27, said David Seaburg, who is the head of sales trading at Cowen and Co.
“I’m pounding the table on Amazon, there’s no question about it. They are going to report a good quarter. Street numbers are going to go higher, and I think the stock is going to soar. I think it could be a 6 percent move, so I look at it and say it’s easily a nice long trade into the quarter, into earnings next week,” Seaburg said last week on CNBC’s “Trading Nation.”
Seaburg argued that Amazon’s stock, which is up more than 36% in 2017 and exceeding $1,000 a share, is witnessing a similar setup to that of Netflix before it released its earnings report. Additionally, Amazon will likely see reduced spending in the second half of 2017 after spending a considerable amount on content in the second half of 2016, and adding fulfillment centers.
According to FactSet estimates, analysts on Wall Street are now – on average – giving the $1,025 stock a price target of $1,136.71. Seaburg has projected that forecasts will have to be “ratcheted up”, and the stock will eventually exceed the $1,100 mark.
At this time, it seems that investors have been ditching shares in Apple (NASDAQ:$AAPL) to purchase a FANG stock, said Miller Tabak equity strategist Matt Maley.
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