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Why Amazon Stock Dropped Today

07-03-2022 · Why Amazon Stock Dropped Today By Rich Smith - Mar 7, 2022 at 12:59PM You’re reading a free article with opinions that may differ from …

07-03-2022

Shares of Amazon ( AMZN 0.16% ) stock tumbled today on some very curious news: Analyst company J.P. Morgan released a note (reported on TheFly.com) that named Amazon the bank's "top internet idea."

Amazon stock fell 4% through 12:30 p.m. ET.

Glowing red arrow trending down on a stock chart.

Image source: Getty Images.

So what

Does that make sense?

Sorta-kinda yes. According to J.P. Morgan's note, the Department of Commerce estimated that fourth-quarter e-commerce sales in the United States were only 7.6 billion, which was below J.P. Morgan's own prediction of 0 billion -- which sounds like bad news, and may have spooked investors.

But here's the thing: This isn't "new" news. The report on e-commerce revenue came out more than two weeks ago, on Feb. 18. So if investors are getting upset about it, they're late to the game today. (On the other hand, J.P. Morgan up and reminding them on the disappointment today may not have helped.)
 

Now what

That being said, here are two big things to keep in mind: First, J.P. Morgan notes that that while part of the decline in e-commerce spending was due to a "continued resurgence of brick and mortar retail sales," which may indicate a shift in consumer spending away from Amazon, the "ongoing supply chain headwinds" were also a factor, and those will subside in time. Long-term, J.P. Morgan still sees a trend toward increased penetration of e-commerce into overall consumer spending.

Second and even more important: While we all quite naturally think of Amazon as an e-commerce company -- an online merchant -- as time goes on, e-commerce is becoming less and less important to Amazon's profits. Fact is, according to the latest data from S&P Global Market Intelligence, Amazon now gets an astounding .5 billion of its operating profits not from e-commerce, but from Amazon Web Services cloud computing. That's 74% of Amazon's profits -- nearly three times as much profit as the company makes from e-commerce.

Viewed in that light, Q4's national e-commerce revenue "miss" looks less like a mortal threat to Amazon and more like a rounding error.

Here's Why Amazon Stock Plunged Today

30-07-2021 · As of 3:15 p.m. EDT, Amazon's stock price was down more than 7%. So what Amazon's net sales jumped 27% year over year to a staggering 3.1 …

30-07-2021

Shares of Amazon.com (NASDAQ:AMZN) fell on Friday following the release of the e-commerce giant's second-quarter results. As of 3:15 p.m. EDT, Amazon's stock price was down more than 7%. 

So what

Amazon's net sales jumped 27% year over year to a staggering 3.1 billion, fueled by strong gains in its cloud computing and advertising businesses. Amazon Web Services (AWS) delivered revenue growth of 37%, up from 32% in the first quarter. Amazon's "other" segment, which is mostly comprised of advertising-related sales, saw even more impressive gains, with revenue rising a blistering 87%.

The strong performances of these high-margin businesses helped Amazon's net income soar 50% to .8 billion, or .12 per share. That was well above Wall Street's consensus estimate for earnings per share of .30. 

Finger pointing to a red and green stock chart that rises sharply and then falls.
Amazon.com's shares sank on Friday. Image source: Getty Images.

Still, investors appeared to focus on Amazon's subdued guidance. Management sees revenue growth decelerating to between 10% and 16% in the third quarter as Amazon laps the torrid gains it experienced during the early stages of the coronavirus crisis. 

Now what

Chief Financial Officer Brian Olsavsky said during a conference call with analysts that Amazon's e-commerce growth is slowing as the economy reopens. "I think the impact of people getting vaccinated and getting out in the world, not only shopping offline, but also living life and getting out, it takes away from shopping time," Olsavsky said. 

Amazon's planned investments in its fulfillment network could also weigh on its profits in the second half of the year. Investors, however, should note that it's these types of investments that have helped the company achieve its dominant competitive position in the online retail and cloud infrastructure markets. Moreover, Amazon's current spending is likely to further strengthen its advantages over its rivals, thereby boosting its long-term profit potential. 

As a result, patient investors may wish to view today's sell-off as an opportunity to buy shares in this e-commerce and cloud titan at a sizable discount.

Why Amazon Stock Dropped Today

28-09-2021 · What happened. Shares of Amazon ( NASDAQ:AMZN) fell on Tuesday after interest rates rose and an analyst warned that rising labor costs could pressure the e …

28-09-2021

Shares of Amazon (NASDAQ:AMZN) fell on Tuesday after interest rates rose and an analyst warned that rising labor costs could pressure the e-commerce giant's profits.

As of 2:45 p.m. EDT today, Amazon's stock was down 2.5%.

So what 

Growth stocks like Amazon are valued based upon their expected future earnings and cash flows. When interest rates increase, investors typically discount their profit projections at a higher rate to account for the larger yields they can earn on bonds and other fixed-income investments. This often leads investors to place a lower present value on growth stocks.

With the yield of 10-year Treasury notes surging above 1.5% in recent days, the prices of many growth stocks have fallen in kind. 

A person is pointing to a stock chart that rises sharply and then falls.
Image source: Getty Images.

Investors are also growing increasingly concerned that Amazon's hiring spree will weigh on its profitability in the coming quarters. On Sept. 14, the company announced it plans to hire 125,000 people to work in its fulfillment centers and transportation operations. The jobs will feature average starting pay of over per hour, comprehensive benefits, and sign-on bonuses of up to ,000 in some locations. 

On Tuesday, Morgan Stanley analyst Brian Nowak cut his price forecast on Amazon's shares from ,300 to ,100. Nowak warned that the company's ballooning employee compensation expenses could dent its operating income by as much as 16% this year and 19% in 2022. Thus, he expects the stock price to remain stagnant until its e-commerce growth begins to reaccelerate next year after lapping difficult coronavirus-related comparisons in the third and fourth quarters. 

Now what

While it's certainly possible that Amazon could deliver lackluster performance in the quarters ahead, investors will likely be best served by adopting a longer-term perspective. Notably, Nowak's reduced price target still represents potential gains to shareholders of roughly 24% from the stock's current price near ,300.

More importantly, he correctly notes that Amazon's moves to expand its workforce could allow it to bolster its logistics network, decrease shipping times, and gain share in the massive e-commerce market. So although these growth investments could dent Amazon's near-term profitability, they are likely to make it a far more valuable company over time.

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  • Why does Amazon not split its stock price?

    Stocks That Don't SplitAmazon (AMZN)Booking Holdings (BKNG)Netflix (NFLX)Berkshire Hathaway (BRK)

    A run-up in the stock market can cause share prices for many stocks to reach eye-popping levels. When investors see high share prices, they often wonder whether the companies will split shares, thus putting more shares on the market but at a lower price.

    When a company splits its shares in two, the company’s overall value remains the same, but a shareholder will double the number of shares in their portfolio, and those shares will trade at half the previous price. For example, a person who holds one share of a company at 0 per share will now hold two shares at apiece. Shares don't always split in exactly two—in some cases, companies will perform a 3:1 split or divide shares even further.

    Let’s look at some familiar stocks that haven't split, even as share prices grew. We’ll then examine the reasons why a company would choose to split its shares of stock or choose not to.

    Here are a few names you might be familiar with that choose not to split their stock in recent years.

    From late 2017 through early March 2021, the price for Amazon shares has roughly tripled. Despite the rapid price rise, there are no signs that a split is imminent. Asked in 2017 whether he’d consider a stock split, then-CEO Jeff Bezos did not rule it out completely, but he also didn't signal an intention to do so anytime soon. It's been more than 20 years since Amazon last split its stock, but back in the late '90s, it was more common. Amazon split its stock three times in a 15-month span in 1998 and 1999.

    Formerly known as Priceline, this travel service company was trading above ,000 per share in March 2021. This high price is at least in part due to a “reverse” stock split in 2003, in which shareholders received one share for every six they owned. The reverse stock split came after a major market downturn that slammed the company’s share prices. Thus, there may be some institutional wariness about splitting and allowing prices to get too low. There’s been no indication from management that a stock split will be happening anytime soon.

    From 2016 through early March 2021, Netflix stock prices have increased from less than 0 to more than 0. At that price, you may think Netflix may be due for a split. While Netflix may choose to split its stock again, the company is only seven years past its most recent stock split—a whopping 7-for-1 split in 2015.

    There is some belief that Netflix could split again, but there is also some skepticism as to whether the company will continue to add subscribers and see revenues rise at the same rate as it has in recent years.

    Warren Buffett’s company is perhaps the best example of a company that rarely shows a desire to split its shares of stock. Since 2018, Class A shares have hardly dipped below 0,000 apiece. You read that right—a stock that trades well into six figures.

    However, while Class A shares trade for the price of a house in some markets, Class B shares are more available to everyday investors. In early March, Class B shares were trading around roughly 0.

    Class B shares don’t have the same voting rights as Class A shares and were essentially created as a compromise between Buffett, who did not want to split shares, and investors, who wanted to be able to purchase shares at a reasonable price. The company split Class B shares 50-1 in 2010 but has never split Class A shares.

    One of the main reasons a company might split its stock is to expand its shareholder base. A split will make shares more affordable for more people, and some companies prefer to avoid seeing their shares concentrated on a small group of people. When shares are spread among more people, an individual can sell most or all of their shares without it having a meaningful impact on the share price.

    More shares also allow for greater liquidity—shares become easier to buy and sell when there are more on the market. When shares become very expensive, the spread between the “bid” price and the “ask” price can be quite large, thus making trading stocks harder.

    Some companies will split shares simply as a way of getting people to believe share values are rising. An investor may see a company split shares and assume that the company is doing quite well, and thus, worth investing in. This is another reason why thoroughly researching your investments is important.

    A very small study found that, on average, markets react positively to stock splits, but that doesn't mean splits have a real impact on the intrinsic value of the company. Unless the stock is facing liquidity issues, there may not be any compelling reason for a company to split its stock.

    Some companies prefer to avoid splitting because they believe a high stock price gives the company a level of prestige. A company trading at

  • ,000 per share, for example, will be perceived as more valuable even though the firm's market capitalization may be the same as a company whose shares trade at .

    In some cases, stock splits can have a negative effect. Smaller companies who split their stocks may have stock prices fall too low. If a stock split is combined with another financial event that further depresses prices, there are two major risks: a negative psychological impact on traders watching the price fall so rapidly, and in the worst-case scenarios, the stock price could fall below a stock exchange's requirements for listing.

    The Nasdaq, for example, wants stocks on the exchange to cost at least

  • . If a stock falls below that price and stays below
  • long enough, it may get delisted. After getting delisted, there could be liquidity issues and brokerages could choose not to trade the stock anymore—not to mention any psychological issues traders may have with a stock losing its exchange status.

    In previous decades, it was impossible to become a shareholder of a company unless you obtain enough money to buy at least a single share. However, that’s no longer the case. There are many new trading platforms and services that allow investors to purchase fractional shares. Some traditional brokerages have also followed suit and begun allowing their retail investors to buy fractional shares.

    Another factor is the increasing popularity of mutual funds and exchange-traded funds (ETFs). These funds give investors exposures to stocks without necessarily owning full shares outright.

    While stock splits can make the shares more affordable for investors, some negatives come along with a company splitting its stocks. Once the stocks are split, records will show that the price of the stocks was cut in half. This isn't an accurate representation of how much the stock is worth since it was split and not the result of market conditions. This, combined with added risks that come with low-priced stocks, impacts the volatility of the stock, making it a riskier investment compared to when the stock price was simply high. 

    A company will make a formal, public announcement when they plan stock splits. During this announcement, they will inform investors of all the details, including the split ratio, the record date, the payment date, and the date the split will be effective (or the ex-split date). Investors have until the record date to own the stock for it to be eligible to be split. The payment date comes after the record date, and this is when those shareholders will be given their stock split shares. The ex-split date, also called the effective date, is when trading of these new shares can begin.

Why does Amazon not split its stock price?
  • Is Amazon stock a good investment?

    Shares of Amazon.com Inc. inched 0.87% higher to ,130.21 Tuesday, on what proved to be an all-around positive trading session for the stock market, with the S&P 500 Index rising 1.58% to 4,471.07 and the Dow Jones Industrial Average rising 1.22% to ...
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  • Why is Amazon stock worth so much?

    Like it or not, Amazon has become possibly the stock for all seasons. This omnipresent online retailer has the unmatched ability to pursue an effective growth strategy in its markets, achieving an astronomical level of success in whatever it has chosen to be in. Does that mean Amazon’s stock should be in your portfolio?
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  • Stocks slip on Amazon drop, but still on track for monthly ...

    30-07-2021 · Stocks slip on Amazon drop, but remain on track for 6th monthly gain By Associated Press . Thanks for contacting us. We've received your submission. Back to …

    30-07-2021

    Stocks fell in afternoon trading on Wall Street Friday with internet retail giant Amazon weighing down major indexes following a weak sales report and forecast.

    The S&P 500 index fell 0.5% as of 12:17 p.m. Eastern and is on pace for a weekly loss, though still poised to finish out July with its sixth monthly gain. The Dow Jones Industrial Average fell 121 points, or 0.4%, to 34,963 and the Nasdaq fell 0.7%.

    Amazon, which fell 6.8%, weighed down the Nasdaq and the benchmark S&P 500, which is about evenly split between gainers and losers. The company reported disappointing sales during its second quarter and gave investors a weak sales forecast. The company did extremely well during the worst of the virus pandemic as people were forced to hunker down and shop from home, but the recovery has more people returning to in-store shopping and other pre-pandemic activities.

    Digital pinboard and shopping tool company Pinterest ran into a similar issue during the second quarter. Its stock slumped 18.5% after reporting disappointing user growth.

    Amazon logo displayed on a smartphone with stock market percentages in the background
    Amazon saw its stock price fall on disappointing second-quarter sales and a weak sales forecast.
    SOPA Images/LightRocket via Getty Images

    It’s been a busy week for corporate earnings and roughly 59% of the companies in the S&P 500 have reported results, according to FactSet.

    “What’s really encouraging is that the sales surprise is trending positive,” said Sal Bruno, chief investment officer at IndexIQ. “That tells me that companies are growing, which goes along with the economic reopening.”

    So far, 87% of companies have reported surprisingly good sales results for the second quarter, according to FactSet.

    People carrying shopping bags walking past stores on a city sidewalk
    An economy working to recover from the pandemic has seen more people returning to in-store shopping and other pre-pandemic activities.
    Getty Images

    Investors are also reviewing the latest economic data as they try to gauge the economic recovery’s trajectory. Consumer spending, which makes up a majority of the economy, rose 1% in June. A key measure of inflation rose 3.5%, marking the fastest such 12-month surge since 1991.

    Inflation fears have been lingering over the market through the year. Investors are trying to figure out whether rising inflation will be a temporary effect of the economic recovery or longer lasting. They are also closely watching for the Federal Reserve’s reaction to both the economic recovery and rising inflation. The central bank is expected to eventually temper its support, through bond purchases and other measures, but the timing is still unknown.

    The yield on the 10-year Treasury fell to 1.24% from 1.27% late Thursday.

    Two people standing in the meat aisle of a grocery store
    Rising prices for groceries and other consumer goods are stoking fears regarding inflation.
    Getty Images

    Indexes have been steadily rising, though trading has been choppy as investors gauge a range of economic data, corporate earnings and news about the virus pandemic. Investors could be in for more of the same in August, Bruno said.

    “The fundamental outlook is generally pretty strong going forward, even if there is some shorter term weakness and volatility,” he said.

    Why Amazon Stock Slipped on Friday

    21-01-2022 · Shares of e-commerce and cloud computing giant Amazon ( AMZN 2.10%) are taking a punch in the gut today. Despite the stock already having slid sharply year to date, shares fell more than 4% on Friday.

    21-01-2022

    Shares of e-commerce and cloud computing giant Amazon ( AMZN 0.45% ) are taking a punch in the gut today. Despite the stock already having slid sharply year to date, shares fell more than 4% on Friday. As of 1:25 p.m. ET, the stock was down 4.2%.

    The slide is likely primarily due to bearishness in the overall market today, especially for growth stocks like Amazon.

    A chart showing a stock price falling.

    Image source: Getty Images.

    So what

    Showing how the overall market is pessimistic on Friday, the S&P 500 is down 1.1% as of this writing. And the tech-heavy Nasdaq Composite is down 1.6%, with many growth stocks, including Amazon, down several percentage points or more.

    The market's sell-off on Friday seems to be prompted by Netflix's ( NFLX 4.12% ) post-earnings 20%-plus drop. The company's guidance for first-quarter subscribers was far below expectations, prompting concerns from investors about intensifying competition for the streaming service. Tech stocks were already facing a lot of pressure, and Netflix's hit seemed to add to market fears.

    Now what

    Amazon will soon get a chance to prove that its sell-off has gone too far. The company's fourth-quarter earnings report is scheduled for Thursday, Feb. 3, after market close. 

    The quarterly report follows a dramatic slowdown in Amazon's revenue recently. After growing first-quarter 2020 revenue 44% year over year, growth slowed to 27% in the second quarter, and then 15% in the third. 

    Management guided for further deceleration in the fourth quarter. Specifically, Amazon said it expects revenue to be between 0 billion and 0 billion, translating to 4% to 12% year-over-year quarterly growth.

    Amazon Stock Price Down 9% in 2022 - Time to Buy AMZN ...

    20-01-2022 · Amazon was the worst-performing FAANG stock in 2021. The stock underperformed the markets by a wide margin last year and 2022 is looking no better. AMZN stock is now down over 9% in 2022 and is drifting towards its 52-week lows. What’s the 2022 forecast for the stock and should buy the dip? Amazon stock recent developments

    20-01-2022

    Amazon was the worst-performing FAANG stock in 2021. The stock underperformed the markets by a wide margin last year and 2022 is looking no better.

    AMZN stock is now down over 9% in 2022 and is drifting towards its 52-week lows. What’s the 2022 forecast for the stock and should buy the dip?

    Amazon stock recent developments

    Netflix released its fourth-quarter earnings yesterday. It was the first FAANG name to release its earnings. However, the earnings were a big disappointment and despite massive investment into new content, the company’s subscriber growth numbers were below estimates. Several analysts downgraded the stock and it is trading sharply lower in premarkets today.

    There are a couple of reasons why Netflix’s earnings miss matters for Amazon investors. Firstly, it has dampened the sentiments towards FAANG names. Secondly, the tepid subscriber growth numbers don’t bode well for other streaming companies as well. Amazon has its own Prime streaming service under which it also gives an additional advantage of free deliveries.

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    Anti-trust trouble

    US tech giants have been facing heat over their alleged monopolies. The Senate Judiciary Committee has approved an anti-trust bill. As expected, tech giants like Apple and Google have opposed the bill. An Amazon spokesperson termed it an “ambiguously worded bill with significant unintended consequences” for small businesses.

    Amazon would release fourth-quarter earnings

    Amazon would soon release its fourth-quarter earnings. Analysts polled by TIKR expect the company to post revenues of 7.6 billion, a YoY rise of 9.7%. Here it is worth noting that AMZN has missed revenue estimates for two consecutive quarters. Also, its fourth-quarter guidance was also below par.

    Analysts expect Amazon’s adjusted EPS to fall 73% to .71 in the quarter. During the previous earnings call, the company had warned that higher expenses would take a toll on its profitability in the fourth quarter. AMZN’s CEO Andy Jassy said, “In the fourth quarter, we expect to incur several billion dollars of additional costs in our Consumer business as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs.” At the bottom end of the guidance, Amazon expects the higher costs to totally wipe off its operating profits for the quarter.

    AMZN stock forecast

    Despite the underperformance, Wall Street analysts remain bullish on Amazon stock. Many brokerages including Cowen, Bank of America, and Goldman Sachs have listed Amazon as a top pick for 2022.

    Of the 52 analysts covering AMZN stock, 50 rate the stock as a buy while two rate it as a hold. None of the analysts have a sell or equivalent rating on the stock.

    Its median target price of ,100 implies an upside of 37% over current prices. Its lowest target price is ,473 is a premium of 16% while the highest target price of ,000 is a premium of 67% over current prices.

    Bank of America reiterated Amazon as a buy earlier this month. It said, “We have a positive outlook for 3-5 year eCommerce growth given sub-20% penetration, and, with market share gains in 2021, we see Amazon as well positioned for sector growth reacceleration in 2H′22 and into 2023.”

    Amazon has a strong competitive position

    Amazon is the leader in the US e-commerce market. Also, it is the largest cloud infrastructure company accounting for almost a third of the total market. The pace of digitization has increased due to the COVID-19 pandemic. A lot of consumers who were not comfortable with online shopping have also pivoted to buying goods online. While some of the consumer buying will revert back to brick-and-mortar stores, many consumers might stick to the e-commerce platforms given the ease, better prices, and availability of more buying choices.

    Amazon stock long term forecast

    Amazon is not only an e-commerce platform but a complete ecosystem. The company has services like Prime which add to customer stickiness on the platform. Also, it is a play on the massive amount of user data that it has which it can use to show relevant products. There is also the network effect as the availability of wider choices on the platform acts as a competitive advantage and builds high barriers of entry. The company has built a strong moat with its ecosystem which is impeccable.

    Along with the domestic markets, Amazon also allows users to buy products internationally. The company’s customer service is also a USP even as there would be the odd event of a buyer not being happy with the services. The complete ecosystem that AMZN has built is hard to replicate easily. For many people across the globe, Amazon and e-commerce are synonymous, just like internet browsing and Googling are used interchangeably.

    amazon stock has fallen

    Should you buy AMZN stock?

    AMZN’s valuations look attractive after the recent underperformance. There has been a sell-off in growth names which has hit all the companies, including the fundamentally strong quality names like Amazon. However, AMZN is a long-term growth story as both e-commerce and cloud are structural growth themes.

    While Amazon stock might continue to remain volatile amid the mayhem in US tech stocks, at these prices, it looks at attractive buy, especially for long-term investors.

    Amazon stock technical analysis

    While AMZN stock looks a good buy based on fundamentals, it is looking very weak on the charts and has fallen below key long-term resistance. The stock trades below all key moving averages like the 50-day, 100-day, and 200-day SMA (simple moving averages). Its 50-day SMA also risks falling below the 200-day SMA, which would mean a death cross formation.

    However, if you want to buy the stock for the long term, it would make sense to start accumulating AMZN at these prices and add more shares if the price falls further.

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    Amazon stock just had its worst week since 2018

    21-01-2022 · Shares of Amazon fell 12% for the week, as a broader market sell-off pressured technology stocks. It marks Amazon’s worst one-week performance in four years, since Dec. 21, 2018, when the shares ...

    21-01-2022

    • Amazon stock just closed out its worst week in four years, with shares falling 12% for the week.
    • Prior to Friday's close, Amazon's worst week was Dec. 21, 2018.

    Amazon CEO Andy Jassy

    F. Carter Smith | Bloomberg | Getty Images

    Shares of Amazon fell 12% for the week, as a broader market sell-off pressured technology stocks.

    It marks Amazon's worst one-week performance in four years, since Dec. 21, 2018, when the shares fell 13.4%.

    Markets dropped Friday as investors grappled with the prospect of higher interest rates and mixed company earnings reports.

    The tech-heavy Nasdaq Composite slumped 1.9%, and the S&P 500 declined 1.3%. The Dow Jones Industrial Average slid 1.3%.

    Investors are increasingly nervous the Federal Reserve will have to raise interest rates several times this year to tackle high inflation. Adding to investors' concerns, Netflix on Thursday reported a disappointing subscriber outlook, which sent its shares plunging almost 22% on Friday.

    Netflix is the first major technology company to post earnings this season. Apple, Microsoft and Tesla are slated to announce financial results next week.

    Amazon is scheduled to report results for the fourth quarter on Feb. 3.

    WATCH: Investors need to take a breath, next week will bring strong earnings: Evercore's Emanuel

    Why Amazon Stock Is Down By 7% Today

    Amazon Stock Dives On Weak Q3 2021 Guidance Shares of Amazon found themselves under significant pressure after the company released its second-quarter earnings report.

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    Amazon Stock: Why The Smart Money Is Running Away

    Amazon stock is no longer the most popular holding among hedge funds. The Amazon Maven explains if a deterioration in business fundamentals might be the culprit.

    Amazon stock (ticker $ (AMZN) - Get Amazon.com, Inc. Report) has been a favorite in the hedge fund world. According to Goldman Sachs, shares of the e-commerce giant appeared the most as a top 10 holding at the end of 2020. But in the first quarter of 2021,  (AMZN) - Get Amazon.com, Inc. Report dropped to the third spot, losing ground to Facebook and Microsoft.

    Below, the Amazon Maven reviews what has most likely contributed to the stock having lost its “darling of the Smart Money” status early in 2021.

    Figure 1: Amazon.com logo.

    Figure 1: Amazon.com logo.

    Unsplash

    Something wrong with the company?

    At first glance, there does not seem to be anything wrong with Amazon’s business. In the most recent quarter, the company delivered an earnings smasher, with EPS (earnings per share) increasing by a jaw-dropping 215% year-over-year.

    Revenue growth of at least 40% in key subsegments, like online stores and third-party seller services, led to Amazon delivering (1) its first non-holiday quarter of sales above 0 billion and (2) the largest quarterly top-line increase of the past five years, at least.

    There is nothing about the graph below, which depicts revenues for the North America and AWS segments since 2014, that spells trouble for Amazon. The company seems to be a beneficiary of secular and temporary trends in online retail, cloud adoption and resilient consumer spending.

    Figure 2: Amazon's North America and AWS revenues since 2014.

    Figure 2: Amazon's North America and AWS revenues since 2014.

    DM Martins Research

    A broad market issue

    Considering the above, why would hedge funds have lost some of their interest in Amazon stock this year? If company fundamentals do not quite explain the phenomenon, market dynamics probably do.

    For starters, 2020 was an outstanding year for AMZN. Shares gained 76%, beating the S&P 500 by the widest margin since 2015. This was also Amazon stock’s sixth consecutive year of positive returns. Maybe the smart money figured that it was time to look for opportunities elsewhere.

    But also, 2021 has been notoriously good for cyclical stocks in the energy, industrials, and financial services sectors – and not so much for tech and growth stocks. This is the case primarily due to (1) the imminent reopening of the global economies and (2) rising inflation and interest rates.

    Under this scenario of economic rebound, growth stocks that carry high valuation multiples tend to perform worse than peers. As the EV-to-FCF chart below depicts, AMZN is about as expensive a stock as it gets in the mega-cap world – hence a likely loser in this market rotation.

    Figure 3: EV-to-FCF: AMZN vs. S&P500 vs. FAAMG except AMZN.

    Figure 3: EV-to-FCF: AMZN vs. S&P500 vs. FAAMG except AMZN.

    Stock Rover

    It is probably this move away from tech growth and towards cyclical value that best explains why hedge funds have, to an extent, abandoned Amazon stock and favored either (1) lower valuation tech, like Facebook, or (2) recovery stocks, like GM and Caesars Entertainment.

    Twitter speaks

    What do you believe best explains hedge funds having moved away from Amazon stock lately? Check out the Twitter poll and leave your opinion below.

    Read more from the Amazon Maven:

    • Amazon Stock: An Unlikely Warren Buffett Holding
    • A Look At The New Amazon Without CEO Jeff Bezos
    • Amazon Stock 101: A Primer For AMZN Investors

    (Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Amazon Maven)

    Why Amazon.com Inc. Stock Dropped Today

    Why Amazon.com Inc. Stock Dropped Today. Read full article. ... Shares of Amazon.com ... it's no surprise to see Amazon stock falling today in response.

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    Amazon Stock Drops 7.2% As Andy Jassy Presides Over Slower ...

    29-07-2021 · 2021 is proving to be a good year for Bezos to do other things. After all, in the decade ending 2020, Amazon’s revenue grew at a 27.4% average …

    29-07-2021

    Western Digital CIO Steven Phillpott (left) speaks with CEO Andy Jassy (middle) and VMware CEO ... [ ] Parick P. Gelsinger (right) during a press conference announcing Amazon's cloud service, AWS, partnering with VMware Cloud creating a new integrated cloud service on Thursday, October 13, 2016, in San Francisco, Calif. (Photo By Liz Hafalia/The San Francisco Chronicle via Getty Images)

    San Francisco Chronicle via Getty Images

    Jeff Bezos’ final quarter as CEO left his successor a mighty big challenge: how to keep Amazon’s revenue growing way north of 20% a year.

    Sadly for CEO Andy Jassy, Amazon AMZN expects its revenue growth rate to plunge in half from 27% in the second quarter — a disappointing .4 billion below analyst estimates — to 13% in the third quarter, according to the Wall Street Journal.

    2021 is proving to be a good year for Bezos to do other things. After all, in the decade ending 2020, Amazon’s revenue grew at a 27.4% average annual rate while its stock soared at 33.2% a year.

    The company is losing ground so far this year. As of July 30, Amazon stock was up 10.5% — trailing the S&P 500’s roughly 17% increase. And that 13% revenue growth forecast for the third quarter is less than half Amazon’s growth over the last decade.

    After the earnings announcement, Amazon shares lost about 7.2% in pre-market trading as of 9:06 AM on July 30.

    I think this could be a buying opportunity because — rather than the economy returning to normal — the rapid increase in Covid-19 cases could lead to a return to lockdowns that boosted Amazon’s growth in 2020.

    (I have no financial interest in the securities mentioned in this post)

    Amazon’s Disappointing Second Quarter Report

    Wall Street rewards investors who own shares of companies that exceed growth expectations and boost their guidance above analysts’ expectations.

    Amazon missed the high end of its revenue forecast for the first time in two years. And the midpoint of its guidance of 13% revenue growth in the third quarter “would be Amazon’s slowest growth rate in 20 years,” noted the Journal.

    Were it not for the way Wall Street brackets companies by its expectations, Amazon’s results are exceptional. How so? According to CNBC, Amazon revenues grew 27% to over 3 billion and it exceeded EPS estimates by 23% earning .12.

    However, Amazon’s revenue was .4 billion below what analysts surveyed by Refinitiv expected and its revenue growth was much slower than the 41% surge it enjoyed in the second quarter of 2020, according to CNBC.

    For the third quarter, Amazon estimates revenues in the range of 6 billion to 2 billion — the midpoint of which represents 13% growth, according to the Journal, and about billion below the consensus estimate.

    Unfortunately, Amazon’s faster-growing business lines — “Other” and AWS -- are not large enough to offset the slowdown in its online sales growth.

    Its online stores slowed down dramatically. “Sales in Amazon’s online stores grew just 13% in the quarter to .16 billion from .9 billion a year ago in the same quarter, while analysts on average expected .35 billion, according to FactSet,” noted MarketWatch.

    Two of its non e-commerce businesses did nicely. For example, Amazon’s “other” unit — 7% of total revenue -- which sells subscriptions and advertising — grew 87%. Revenues at AWS -- 13% of Amazon’s total revenue -- increased 37% to .81 billion 1 million more than analysts estimated.

    Amazon’s CFO attributes the growth slowdown to a drop in demand compared to the 2020 lockdown due to Covid-19. As Brian Olsavsky told investors, in the middle of May 2020, Amazon’s growth rates jumped to a range from 35% to 45%. With its customers taking vacations in 2021, Olsavsky expects them to “do other things besides shop.”

    Jassy -- who did not attend the earnings conference call — issued a statement in which he told Amazon employees — its headcount has increased 52% to 1.33 million in the last year— that he was “very excited to work with you as we invent and build for the future.”

    I think Jassy missed an opportunity to begin to communicate his plans for Amazon’s future now that he has been CEO for the last three weeks.

    Return to Social Distancing?

    One thing that could help Jassy is that those dramatically lowered growth expectations could make it easier for Amazon to exceed expectations when it reports its third quarter results.

    That’s because it appears to me that Amazon’s lower growth expectations are based on the assumption that the worst of the pandemic is behind us and the U.S. will not go back to social distancing.

    At the rate Covid-19 infections are increasing, it would not surprise me to see hospital intensive care units approaching capacity. If that happens, we could return to the social distancing measures that prevailed in 2020 before Covid-19 vaccines were widely available.

    How fast are infections growing? According to the Washington Post, over the past month, “Covid-19 cases quadrupled, prompting public health authorities to recommend that vaccinated people resume wearing masks indoors in high-risk areas.”

    With the rise in the delta variant, the “specter of renewed business closures, disrupted school reopenings — and their implications for the labor market — and divisive fights over private-sector vaccination mandates,” could send the economy back into lockdown.

    Meanwhile hospitalizations and deaths are heading higher in Florida, Missouri and Arkansas. Officials in Orange County, Fla. which includes Orlando were in “’crisis mode’ as new cases of covid-19 reached levels seen during the worst days in 2020,” noted the Post.

    I think it is possible that Amazon is being overly pessimistic in its growth forecasts because the delta variant and the 44% of unvaccinated Americans could soon lead policymakers to send us back to the lockdowns of 2020.

    Analysts Lowering Their Estimates

    Analysts are cutting their estimates on Amazon’s stock price, according to MarketWatch. For example:

    • Down 11% to ,100 (JP Morgan)
    • Down 6.8% to ,100 (Mizuho)
    • Down 5% to ,800 (Truist)
    • Down 4.5% to ,400 (Benchmark)

    Not all analysts were gloomy about Amazon’s prospects. MKM Partners managing director Rohit Kalkarni, set a ,075 price target before Amazon announced second quarter results.

    He wrote, “on the strength of Amazon advertising, subscriptions (Prime), and cloud computing (AWS), we expect Amazon to report upside to Street and its guidance in 2Q,” noted MarketWatch.

    Sadly, Kulkarni has egg on his face now.

    It’s time for Jassy to explain how Amazon will invest in growth opportunities to restore its revenue growth to 27%.

    Until he can do that well, Amazon shares will lag further behind the market.

    3 Reasons Why Amazon Stock is Dropping

    3 Reasons Why Amazon Stock is Dropping. Amazon reported a decline in third-quarter earnings after the market closed on Thursday. The e-commerce giant recorded a profit of .1 billion which came out to .23 per share. The earnings number fell …

    3 Reasons Why Amazon Stock is Dropping

    Amazon reported a decline in third-quarter earnings after the market closed on Thursday. The e-commerce giant recorded a profit of .1 billion which came out to .23 per share. The earnings number fell short of analysts’ expectations for an EPS of .59 per share. During the same quarter in 2018, earnings were .75 per share. This was the first time Amazon’s earnings have declined on a year-over-year basis since June 2017.

    In terms of revenue, Amazon comfortably beat expectations. The company recorded sales of .98 billion, which was higher than the .83 billion that was expected. In the same quarter in 2018, Amazon had recorded .58 billion in sales.

    Earnings season is a time when investors pay close attention to hits and misses. When a company reports lower revenue and/or earnings, it can indicate an underlying problem(s) that will affect the company’s short- or long-term growth.

    So the two questions on investor's minds are why did Amazon miss on earnings, and how concerned should investors be? Here a few reasons and explanations for why they should not be that concerning.

    Amazon is spending a lot of money on one-day delivery

    Amazon has unapologetically put revenue growth ahead of profits. The company’s move towards one-day delivery for Prime members is a great example of this. However, this is costing the company money. And Amazon indicated that they anticipate to be spending even more money during the upcoming holiday season.

    “We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” Amazon Chief Executive Jeff Bezos said in Thursday’s earnings announcement. “Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers.”

    (Ad)

    Looking for the next tech disruptor? The Metaverse represents the next iteration of the internet and social media. Nextech develops and operates AR and VR platforms critical for companies creating and populating this new landscape.

    How concerned should you be? I don’t think you need to be very concerned. The question you have to ask yourself is whether or not Amazon will start suffering a decline in revenue. Based on the traffic I see from Prime trucks in my neighborhood, I don’t see that as being very likely. And prior to the second quarter of this year, Amazon had been reporting record profits. For all of 2018, Amazon reported a record billion in profits. However, this number was more than three times its previous annual record. The company also had reported record quarterly profits in the four quarters that preceded this year’s second-quarter downturn.

    The bottom line, Amazon is a money-making machine and I don’t see that changing.

    What Are Fang Stocks 

    Amazon Web Services (AWS) is showing decelerating growth

    In their earnings report, Amazon reported that AWS (their cloud computing division) increased revenue by 35% in the third quarter. While the revenue from AWS is growing faster than at Amazon.com (which grew at 24%), the revenue growth was down from 35% in the second quarter. The 35% also marked the lowest growth for the division in over five years.

    How concerned should investors be? Slightly. This is because AWS has been the cash cow for Amazon in terms of operating income over the past four years. In the third quarter, AWS operating income was .26 billion which was 9% higher on a year-over-year basis. However, the percentage gain of 8.9% works out to the slowest growth in four-and-a-half years. Still AWS remains the dominant player in the cloud infrastructure and advertising revenue growth is accelerating faster than expected.

    The bottom line, AWS remains the go-to company as tech startups look to go public. As long as that trend continues, the long-term outlook remains solid.

    Amazon is under regulatory scrutiny

    As reported by Lisa Lacy of Adweek, anti-trust action against Amazon will be the topic of conversation as the United States moves into an election year. Sen. Elizabeth Warren, a leading contender for the Democratic nomination has a plan to break up Amazon. Warren’s plan would cut off Amazon’s Marketplace and Basics line of products from the rest of the company. In Warren’s outlook, this would undo the “damage” done by the acquisitions of Whole Foods and Zappos that Warren deems anti-competitive.  

    However, Lacy reports a more likely outcome would be to see AWS spun off as a separate company. This is the opinion of NYU marketing professor Scott Galloway and Atlantic writer Franklin Foer. Ultimately this will be Amazon’s decision. However, one reason the spin-off may happen is as a preemptive strike against regulators.

    “If the writing is on the wall and pressure is building for regulatory action … then (Amazon) might decide to do it in a way they can control,” says Matthew Wilson, an associate professor of political science at Southern Methodist University.

    How concerned should investors be? This may be the most troublesome long-term issue. Amazon has changed the retail model to one where the line between convenience and immediacy is blurred. At the same time, the more Amazon expands, the more consumers are realizing how much of their privacy they have conceded.

    At issue is Amazon’s use of the data it has on its third-party sellers as well as the increasing encroachment of Amazon’s digital assistant Alexa into consumer’s lives. For example, Alexa can theoretically become part of a refrigerator that knows if perishable items, such as milk or eggs are going to go bad and reorders them automatically from Whole Foods. No action is needed by the consumer, but the consumer also loses the choice of buying those items from other retailers.

    The bottom line, Amazon may look like a very different company in a year’s time. This would be the largest obstacle to growth.


    7 Pharmaceutical Stocks to Buy For a Healthy Portfolio in 2022One year ago, investors expected 2021 to be a huge year for pharmaceutical stocks. The bullish perspective was that as vaccines rolled out and the economy reopened, investors would shift from biotech stocks to traditional pharmaceutical stocks. But the Delta variant has kept Covid-19 top of mind for many investors. While it’s true that some pharmaceutical stocks were part of the vaccine race, other players in the space have not performed as well as was hoped. Case in point, as of October 6, 2021, the iShares U.S. Pharmaceuticals ETF (NYSEARCA:IHE) is up only 9.7% in the last 12 months. And if you bought shares of the fund at the beginning of the year, you have no growth to show for your patience. There are reasons beyond Covid-19 to consider when assessing the disappointing performance of pharmaceutical stocks. One is the current political climate which is making no secret of its desire to reshape the healthcare industry. And it has the pricing practices of “big pharma” firmly in its crosshairs. However, the pharmaceutical sector is still loaded with quality stocks for investors who are willing to accept the inherent risk. And that’s the focus of this special presentation. In the next few minutes, we’ll take a look at seven pharmaceutical stocks that are ready to make strong moves forward in 2022.

    View the "7 Pharmaceutical Stocks to Buy For a Healthy Portfolio in 2022".


    Compare These Stocks  Add These Stocks to My Watchlist 
    Here Are 3 Key Reasons Amazon Stock Is Set to Decline

    11-09-2020 · AMZN stock faces rising risks. Labor strife, antitrust concerns, and improving e-commerce niche sites all loom as hazards for the company.

    11-09-2020

    Amazon (NASDAQ:AMZN) has been on an unstoppable winning streak for many years now. The company has brushed aside all sorts of concerns about overvaluation and poor profitability. The move into Amazon Web Services in particular truly catapulted AMZN stock to its spot among the world’s most valuable investments.

    Amazon (AMZN) logistics center in Szczecin, Poland.
    Source: Mike Mareen / Shutterstock.com

    It’s also made fortunes. Jeff Bezos is the world’s wealthiest man, and his ex-wife, MacKenzie Scott, is now the world’s richest woman, thanks to her large Amazon stock position resulting from the divorce. It’s not just the insiders either; Amazon has created countless millionaires among investors.

    However, the meteoric rise of AMZN stock is now coming to an end. The company has faced plenty of criticism over the years from investors, primarily due to low profitability. That’s been overcome with continuing strong revenue growth. But bigger issues are emerging.

    Amazon has growing employee unrest, government regulators smell blood, and meanwhile, numerous e-commerce rivals have sprung up and are now attacking some of the company’s most profitable niches.

    1. Rising Employee Strife and AMZN Stock

    Amazon is having increasingly tense relations with its employees. It already was a focal point in the battle for a /hour minimum wage. And following the novel coronavirus, employees want much more. Ex-employee Chris Smalls, who claims Amazon wrongly fired him, is now leading a collective bargaining movement for employees.

    In a recent interview, Smalls laid out their agenda:

    “Our demands are simple […] /hour, as far as minimum wage. We feel the cost of living is going up, this company’s revenue is going up. This company made an abundance of billions of dollars off the profit of people, at the expense of our backs. So we would like to have a decent living wage.”

    Smalls didn’t stop there. He says Amazon needs to provide free health care and child care for workers. Additionally, he says that Amazon must provide 0,000 in compensation for each Amazon worker that died during Covid-19 due to the company’s allegedly unsafe work environment and lack of preventative measures to stop the spread of the virus.

    Investors may try to ignore this. However, it’s becoming increasingly serious. Smalls’ group recently set up a guillotine outside of one of Bezos’ houses in a dramatic protest. Additionally, reporters recently exposed the fact that Amazon is paying tons of money to spy on its employees in an effort to keep them from unionizing. Needless to say, this is a terrible look for Amazon, and could both irritate the public and draw hostile regulation from politicians.

    1. Antitrust Concerns

    Amazon has been a bipartisan target for criticism. Democratic politicians such as Bernie Sanders and Andrew Yang have blasted Amazon for paying insufficient wages while destroying malls and Main Street businesses.

    Meanwhile, the Trump Administration has launched investigations into the big tech companies, including Amazon. It’s also no secret that Jeff Bezos and President Trump have some animosity toward each other.

    However, through the pandemic, Amazon had largely avoided any actual consequences for their perceived monopoly position in online retail. That may change though. While the pandemic has accelerated Amazon’s market share gains, it has also amplified criticism that the company is too powerful.

    Amazon’s latest move — turning failing malls into distribution centers — is drawing particular ire. With Amazon having crushed many local towns and cities’ tax bases, look for politicians to force Amazon to pay up for its past anti-competitive behavior.

    3. Rising E-Commerce Competition

    The one ray of good news on the anti-trust front is that Amazon is starting to lose share in many e-commerce niches. Actually, that may be bad news too though, in the broader AMZN stock outlook. Over the past six months, a ton of e-commerce stocks such as Shopify (NYSE:SHOP), Etsy (NASDAQ:ETSY) and Chewy (NYSE:CHWY) have positively blasted off.

    All these sites serve verticals that Amazon could dominate. Instead, Amazon is losing ground to niche competition left and right. It’s also getting crushed in the grocery wars, as the Whole Foods acquisition appears to be a lemon.

    Turns out, rivals aren’t just going to let Amazon eat the whole internet without a fight. While this may keep the antitrust regulators at bay a little longer, it’s still not great for Amazon’s share price. When investors are betting on Amazon remaining invincible indefinitely, any sort of mishap can cause the share price to slide.

    AMZN stock sells for such an absurdly high multiple that it would take nearly miraculous execution from the management team to warrant a higher share price once the Covid-19 tailwinds are gone. And instead, large chunks of the total addressable market are disappearing as sites like Shopify and Etsy are enjoying historic growth this year.

    AMZN Stock Verdict

    None of these three factors will necessarily sink AMZN stock tomorrow. The company has several potential catalysts that could still power shares higher as well.

    At any point, Bezos could copy his peers at Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) and issue a stock split. This might drive up the stock price. Furthermore, the lingering effects of the pandemic may lead to a strong holiday season for Amazon.

    Regardless, huge headwinds will soon slow down Amazon’s rise. After rising sixfold since 2016, look for Amazon stock to deliver far less impressive returns going forward.

    In fact, the unthinkable may happen; AMZN stock could even go down as these pitfalls trip the company up. Both the company and its shareholders have become complacent after years of unbridled success. That’s a risky place to be in the fast-changing world of commerce.

    On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article.

    Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a 0 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

    Amazon Has Lost 3 Billion in Market Value so Far This Week

    15-07-2020 · Amazon has lost as much as 3 billion in market value in three days this week, representing a decline of 7%.. Amazon's market cap of

    .59 trillion as …

    15-07-2020

    Amazon has lost as much as 3 billion in market value in three days this week, representing a decline of 7%.

    Amazon's market cap of

    .59 trillion as of Friday's close fell to an intraday low of

    .48 trillion on Wednesday, according to data from Bloomberg. 

    The drop in Amazon hasn't deterred Robinhood investors. From Monday to Wednesday afternoon, more than 16,000 Robinhood traders bought shares of Amazon, representing an increase of nearly 5%, according to data from Robintrack.net. This suggests investors are actively buying the dip in Amazon.

    Read more: Paul Andreola has a long track record of finding tiny stocks that deliver 10-times returns. He lays out the 4 criteria he looks for when seeking the next explosive pick.

    Investors have bid up shares of Amazon 63% year-to-date, as the company has seen a surge in e-commerce business as more consumers shop from home amid the COVID-19 pandemic. 

    Amazon's steep rally is clearly illustrated in the distance between today's stock price and its 50- and 200-day moving averages. As of Wednesday afternoon, Amazon traded 15% higher than its 50-day moving average of ,625, and 45% above its 200-day moving average of ,088, according to data from StockCharts.com. 

    Growth stocks have been underperforming value stocks this week, as the damage is not just limited to Amazon.

    According to data from Yahoo Finance, growth stocks, as represented by the Russell 1000 Growth ETF, have fallen nearly 1% this week, while value stocks, as represented by the Russell 1000 Value ETF, have risen by nearly 3% in the same time period.

    Some investors think that value stocks are about to finally begin to consistently outperform growth stocks. In a note published on Monday, Bank of America gave seven reasons why value stocks are poised for a comeback.

    Read more: BANK OF AMERICA: Buy these 14 stocks that are likely winners in the pandemic - and will benefit from the biggest trends that will define the future

    At one point, Amazon stock was down 90% but investors ...

    18-12-2018 · Amazon’s stock tumbled month after month as well, losing more than 90 percent of its value in two years. The company weathered the storm, reportedly because of shrewd management and a …

    18-12-2018

    With technology stocks garnering renewed scrutiny, it's helpful to take a look back at one company that has weathered some of the most severe market downturns and serious doubts from Wall Street: Amazon.

    Betting on the online bookstore wasn't always a sure thing.

    Amazon's journey from tiny garage start-up to one of the most valuable companies in the world has paid off for investors, but shareholders needed a strong stomach.

    In the early 1990s, Jeff Bezos walked away from a Wall Street career with an outlandish idea to sell books on the World Wide Web.

    In 1994, he launched Amazon.com.

    "I found this fact on a website that the web was growing at 2,300 percent per year," Bezos told CNBC in a 2001 interview about his early foray into book selling. "The idea that sort of entranced me was this idea of building a bookstore online."

    The site experienced growth quickly, going public three years later with million in revenue and 180,000 customers spanning more than 100 countries (according to its SEC filing).

    But even as the site began growing, many investors had their doubts about Amazon, instead favoring brick-and-mortar book-selling giant Barnes & Noble.

    At an early meeting between Barnes & Noble Chairman Leonard Riggio and Bezos, Riggio reportedly told Bezos he would "crush" Amazon.

    Barnes & Noble dwarfed the young start-up. The traditional bookseller had hundreds of stores and more than billion in revenue. It was also tapping into major Silicon Valley talent to built its own sleek new website.

    On top of that, it was suing Amazon over the start-up's claim to be "Earth's Biggest Bookstore."

    But for those who took a chance and bought Amazon stock at the initial public offering, their investment has returned a compound annual growth rate of 38 percent since the IPO – outperforming the S&P 500 which had a total return of 10 percent annually over the same period.

    Amazon's next big hurdle? The dot-com bubble.

    In the late 1990s, dot-com companies became all the rage on Wall Street.

    Amazon's customer growth and savvy capital fundraising combined to help it rapidly expand its offerings. Soon books became just one part of an expansive online retailer connecting customers with everything from power tools to Pokemon cards.

    The company's valuation soared, hitting more than 50 times its IPO value in December 1999.

    But Nasdaq peaked shortly after on March 10 2000, at 5,132.52. And the bubble burst, sending the composite down to barely 1,100 by October 2002.

    As the crash set in, dot-com companies began folding left and right. Geocities, Webvan and Boo.com were suddenly gone. Hot start-ups like Pets.com and Kozmo that Amazon had invested in itself disintegrated.

    Amazon's stock tumbled month after month as well, losing more than 90 percent of its value in two years.

    The company weathered the storm, reportedly because of shrewd management and a lucky last-minute infusion of capital right before the bubble burst.

    But even for those who bought in at Amazon's dot-com era peak, the investment still paid off. A

    ,000 purchase of Amazon in December 1999 would be worth ,500 today.

    The mid-2000s brought a period of both skepticism and immense growth for Amazon. As the company recovered from the brutal dot-com crash, it rarely returned money to investors or made a profit.

    But Amazon was aggressively reinvesting its revenue. The company continued to expand its customer base and its retail offerings. It also began experimenting with and investing in big new ideas that would payoff later like Amazon Prime, Amazon Web Services and the Kindle.

    Still, the company's stock struggled to outperform its dot-com era highs throughout the 2000s as investors wrestled with fears that the lack of profitability meant it also lacked long-term value.

    Coming out of the 2008 financial crisis, Amazon began growing into the modern company — involved in virtually anything and everything — that it is known for today.

    It released the Echo powered by virtual personal assistant Alexa as well as a successful line of tablets.

    It launched Prime Video and began producing its own original video content.

    It also began breaking into brick-and-mortar retail with its own Amazon book stores and the purchase of Whole Foods.

    Looking ahead, the question is: Can the long bet continue to pay off?

    Tech stocks have been under renewed pressure in recent weeks as the markets have experienced volatility. From September to November, Amazon stock lost a quarter of its value as the wider tech sector took major hits.

    Some analysts say it's a good time to buy in. Others say Amazon's growth rate has hit a ceiling as the company enters maturity.

    Only time will tell who has their finger on the pulse.

    But either way, for those who invested early on and held their nose through some of Amazon's most difficult times, the long bet has paid off with handsome gains.

    Here Are 3 Key Reasons Amazon Stock Is Set to Decline

    However, the meteoric rise of AMZN stock is now coming to an end. The company has faced plenty of criticism over the years from investors, primarily due to low profitability. That’s been ...

    Amazon (NASDAQ:AMZN) has been on an unstoppable winning streak for many years now. The company has brushed aside all sorts of concerns about overvaluation and poor profitability. The move into Amazon Web Services in particular truly catapulted AMZN stock to its spot among the world’s most valuable investments.

    Amazon (AMZN) logistics center in Szczecin, Poland.

    Source: Mike Mareen / Shutterstock.com

    It’s also made fortunes. Jeff Bezos is the world’s wealthiest man, and his ex-wife, MacKenzie Scott, is now the world’s richest woman, thanks to her large Amazon stock position resulting from the divorce. It’s not just the insiders either; Amazon has created countless millionaires among investors.

    However, the meteoric rise of AMZN stock is now coming to an end. The company has faced plenty of criticism over the years from investors, primarily due to low profitability. That’s been overcome with continuing strong revenue growth. But bigger issues are emerging.

    InvestorPlace - Stock Market News, Stock Advice & Trading Tips

    • 7 Sin Stocks to Buy Now as America Reopens

    Amazon has growing employee unrest, government regulators smell blood, and meanwhile, numerous e-commerce rivals have sprung up and are now attacking some of the company’s most profitable niches.

    1. Rising Employee Strife and AMZN Stock

    Amazon is having increasingly tense relations with its employees. It already was a focal point in the battle for a /hour minimum wage. And following the novel coronavirus, employees want much more. Ex-employee Chris Smalls, who claims Amazon wrongly fired him, is now leading a collective bargaining movement for employees.

    In a recent interview, Smalls laid out their agenda:

    “Our demands are simple […] /hour, as far as minimum wage. We feel the cost of living is going up, this company’s revenue is going up. This company made an abundance of billions of dollars off the profit of people, at the expense of our backs. So we would like to have a decent living wage.”

    Smalls didn’t stop there. He says Amazon needs to provide free health care and child care for workers. Additionally, he says that Amazon must provide 0,000 in compensation for each Amazon worker that died during Covid-19 due to the company’s allegedly unsafe work environment and lack of preventative measures to stop the spread of the virus.

    Investors may try to ignore this. However, it’s becoming increasingly serious. Smalls’ group recently set up a guillotine outside of one of Bezos’ houses in a dramatic protest. Additionally, reporters recently exposed the fact that Amazon is paying tons of money to spy on its employees in an effort to keep them from unionizing. Needless to say, this is a terrible look for Amazon, and could both irritate the public and draw hostile regulation from politicians.

    1. Antitrust Concerns

    Amazon has been a bipartisan target for criticism. Democratic politicians such as Bernie Sanders and Andrew Yang have blasted Amazon for paying insufficient wages while destroying malls and Main Street businesses.

    Meanwhile, the Trump Administration has launched investigations into the big tech companies, including Amazon. It’s also no secret that Jeff Bezos and President Trump have some animosity toward each other.

    However, through the pandemic, Amazon had largely avoided any actual consequences for their perceived monopoly position in online retail. That may change though. While the pandemic has accelerated Amazon’s market share gains, it has also amplified criticism that the company is too powerful.

    Amazon’s latest move — turning failing malls into distribution centers — is drawing particular ire. With Amazon having crushed many local towns and cities’ tax bases, look for politicians to force Amazon to pay up for its past anti-competitive behavior.

    3. Rising E-Commerce Competition

    The one ray of good news on the anti-trust front is that Amazon is starting to lose share in many e-commerce niches. Actually, that may be bad news too though, in the broader AMZN stock outlook. Over the past six months, a ton of e-commerce stocks such as Shopify (NYSE:SHOP), Etsy (NASDAQ:ETSY) and Chewy (NYSE:CHWY) have positively blasted off.

    All these sites serve verticals that Amazon could dominate. Instead, Amazon is losing ground to niche competition left and right. It’s also getting crushed in the grocery wars, as the Whole Foods acquisition appears to be a lemon.

    Turns out, rivals aren’t just going to let Amazon eat the whole internet without a fight. While this may keep the antitrust regulators at bay a little longer, it’s still not great for Amazon’s share price. When investors are betting on Amazon remaining invincible indefinitely, any sort of mishap can cause the share price to slide.

    AMZN stock sells for such an absurdly high multiple that it would take nearly miraculous execution from the management team to warrant a higher share price once the Covid-19 tailwinds are gone. And instead, large chunks of the total addressable market are disappearing as sites like Shopify and Etsy are enjoying historic growth this year.

    AMZN Stock Verdict

    None of these three factors will necessarily sink AMZN stock tomorrow. The company has several potential catalysts that could still power shares higher as well.

    At any point, Bezos could copy his peers at Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) and issue a stock split. This might drive up the stock price. Furthermore, the lingering effects of the pandemic may lead to a strong holiday season for Amazon.

    Regardless, huge headwinds will soon slow down Amazon’s rise. After rising sixfold since 2016, look for Amazon stock to deliver far less impressive returns going forward.

    In fact, the unthinkable may happen; AMZN stock could even go down as these pitfalls trip the company up. Both the company and its shareholders have become complacent after years of unbridled success. That’s a risky place to be in the fast-changing world of commerce.

    On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article.

    Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a 0 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

    More From InvestorPlace

    The post Here Are 3 Key Reasons Amazon Stock Is Set to Decline appeared first on InvestorPlace.

    Amazon’s Stock Faces More Declines Short Term

    Amazon's stock is facing a correction.

    (Note: The author of this fundamental analysis is a financial writer and portfolio manager.)

    Amazon.com Inc's (AMZN) stock has doubled in over the past year, with its valuation briefly soaring over

    trillion. But now the stock has dropped by about 6% since reaching an all-time intraday high of 2,050, on September 4. Technical analysis suggests the shares may fall an extra 4%, pushing the stock into a correction, with shares down by 10% from their peak. (For more, see also: Has Amazon Stock Topped Out?)

    Any pullback in the stock is likely only to be short term. That is because analysts expect the company to deliver strong earnings and revenue growth for years to come. (For more, see also: Why Amazon’s Stock Can Rise 45%.)

    AMZN data by YCharts

    Amazon's stock has been rising since April in a technical pattern known as a rising wedge. It is a bearish technical pattern, suggesting the stock will fall. The shares may fall to a price of around

    ,840, which is the next level of technical support. 

    Additionally, bullish momentum has been leaving the stock. It too suggests the stock price will fall. The relative strength index (RSI) has been trending lower since peaking in late January at a level of near 90. But the stock has continued to rise, while the RSI has been trending lower, a bearish divergence.

    Analysts are still very bullish on the stock long term. They are forecasting earnings to climb by almost fourfold in 2018 to .45 per share. This is followed by earnings growth of 46% in 2019, and 48% in 2019. 

    Forecasts call for revenue to be robust too, growing by more than 32% in 2018 to approximately 5 billion. Growth will slow some in 2019 to 22% and then to 20% in 2020. 

    Still, analysts see the shares powering higher, by an average of 13% to a price target of ,164. 

    If the shares drop, it will not be the first time in 2018. The stock plunged by almost 17% in March. It resulted in the stock rising by more than 40% to its current price.

    The pressure will be for Amazon to deliver if it wants its shares to continue to rise. Analysts expect third-quarter earnings to climb by roughly six times to .06 per shares. But what may be an even bigger challenge is satisfying investors expectations. 

    Michael Kramer is the Founder of Mott Capital Management LLC, a registered investment adviser, and the manager of the company's actively managed, long-only Thematic Growth Portfolio. Kramer typically buys and holds stocks for a duration of three to five years. Click here for Kramer's bio and his portfolio's holdings. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future performance.

    Amazon’s Stock May Drop Further Despite Big Earnings Beat

    28-10-2020 · Amazon reported blow-out third quarter results on October 29, easily beating analysts’ expectations. But it still may not have been enough!

    28-10-2020

    02 April 2020, Brandenburg, Kiekebusch: The logo of Amazon, (Amazon.com, Inc., listed US-American ... [ ] online mail order company), at the mail order warehouse in Kiekebusch, a district of the municipality of Schönefeld in the district of Dahme-Spreewald. Photo: Patrick Pleul/dpa-Zentralbild/ZB (Photo by Patrick Pleul/picture alliance via Getty Images)

    dpa/picture alliance via Getty Images

    Amazon.com Inc. (AMZN)  reported blow-out third quarter results on October 29, easily beating analysts’ expectations. But it may be a disappointment on Amazon’s Web Services business that turned the stock lower by almost 2% in the after-hours session.

    The equity has had a tremendous move in 2020. However, the stock isn’t cheap, with the shares trading at its highest valuation in years. The technical chart wasn’t in great shape heading into results either.

    AWS

    According to data from Refinitiv, analysts were looking for third quarter AWS revenue in a range of .2 billion to .9 billion, or .57 billion at the mid-point. Revenue did come in better than the mid-point of the range at .6 billion. Still, it is likely the disappointment that AWS didn’t come above the high end, which turned the shares lower. Additionally, AWS had revenue growth for its second quarter in a row below 30%, coming in at 29%.

    While the miss appears minor on the surface, AWS is the high margin part of Amazon’s business. It accounts for the majority of Amazon’s operating income. In the third quarter, Amazon had a total operating income of roughly .2 billion; AWS represented 57% of that operating income, or approximately .5 billion.

    Guidance

    Additionally,  the company is guiding operating income in a range of

    billion to .5 billion, or .7 billion at the mid-point.  That is lower than the operating income of about .9 billion a year ago, a drop of over 29%.

    The operating income decline is surprising since the company is guiding revenue to a range of 2 billion to 1 billion, or 6.5 billion at the mid-point, growth of about 33%. That is much better than analysts’ estimates for 2.3 billion. Still, the strong topline growth and declining operating income indicate the company is likely to be spending a lot.

    Amazon technical chart

    Tradingview

    Meanwhile, the chart has a bearish take to it with the potential for a double top reversal pattern marked by the two peaks around a price of ,250. It could even trigger a very sharp decline in the shares to potentially as low as ,465.  For that pattern to work, the stock would first need to drop below a technical support level of around ,900.  Additionally, the relative strength index also suggests lower prices lie ahead because it has been trending lower, indicating the momentum is leaving the stock.

    Amazon price to sales ratio

    Refinitiv

    The stock isn’t cheap, currently trading at a price to sales multiple at the upper end of its 20-year range. This means that investors may continue to be super critical of the smallest issue that comes up down the road.

    Michael Kramer is a financial market strategist and the portfolio manager of the Mott Capital Thematic Growth Portfolio.

    Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results.

    Amazon was the worst-performing FAANG stock of 2021 — here ...

    05-01-2022 · Amazon shares increased a meager 2.4% in 2021, vastly underperforming its Big Tech peers. The e-commerce company’s stock was weighed down by tough year-over-year comparisons, underperforming...

    05-01-2022

    Photographer: Thorsten Wagner/Bloomberg via Getty Images

    Bloomberg | Bloomberg | Getty Images

    Amazon shares finished 2021 as the biggest laggard among the mega-cap technology names, but there's reason to believe 2022 could be a brighter year for the stock.

    Shares of Amazon rose a measly 2.4% in 2021, vastly underperforming the four other so-called FAANG stocks. Apple gained 34%, Meta Platforms (formerly Facebook) saw its shares rise 23%, Netflix increased 11% and Alphabet, the year's top tech stock, climbed 65%. At the same time, fellow tech giant Microsoft was up 51% for the year and the tech-heavy Nasdaq Composite gained 21% .

    The last time Amazon delivered such lousy returns for investors was 2014, when the stock slumped 22%.

    Several factors lie behind Amazon's poor stock performance last year, according to analysts.

    Amazon, like other e-commerce companies, faced tough year-over-year comparisons to 2020, when the coronavirus pandemic led to a surge in online orders. 

    Consumers cut their trips to physical stores in order to avoid exposure to the virus and flocked to online retailers for everything from toilet paper and face masks to office furniture and dumbbells. The shift to online shopping boosted sales for Amazon, eBay, Etsy, Wayfair and others, benefiting their growth rates and lifting their stock prices. 

    Amazon's profits tripled year over year beginning in the second quarter of 2020, the first period to reflect the pandemic-fueled bump in business, and in the three consecutive quarters.

    By spring of 2021, as a growing number of Americans got Covid-19 vaccinations, consumers began returning to stores and shifted some of their spending to pre-pandemic habits like travel and dining out. 

    Even though online shopping remained robust, Amazon saw its impressive year-over-year growth rates begin to fade. In the second quarter of 2021, Amazon's revenue grew by 27%, which was a significant slowdown from the year-ago period, when sales skyrocketed 41%.

    Amazon underperformed expectations in its last two earnings reports, which also weighed on the stock, said Tom Forte, senior research analyst at D.A. Davidson, in an interview. 

    Amazon's other key businesses, cloud computing and advertising, had a "very good year" in 2021, but that didn't overshadow the poor performance of Amazon's core retail division, said Forte, who has a buy rating on Amazon's stock and a price target of ,900 per share.

    "If you look at 2021 as a standalone, it shows that doing well in cloud and advertising is not enough on its own," he added.

    Investor concerns around rising costs in Amazon's core retail business may have also contributed to the stock's underperformance, Forte said.

    Amazon had warned Wall Street for much of 2020 and 2021 that it would spend billions of dollars on coronavirus-related costs, like safety measures for front-line workers and growing its physical network to keep up with demand. 

    Then, just as Covid-related costs began to temper last year, Amazon and other major corporations were hit with global supply chain constraints and labor challenges. CEO Andy Jassy said Amazon would take on "several billion dollars" of extra costs in the fourth quarter of 2021 to address those issues.  

    Amazon raised wages and offered bonuses to attract workers in the tight labor market. Facing inconsistent staffing levels in some warehouses, Amazon had to reroute packages over longer and sometimes costlier distances to facilities with enough staff on hand to process orders. 

    "We all knew that there were expenses associated with Covid-19, but it was a surprise to me when I realized that they were having a labor challenge," Forte said. "It was a negative surprise and I do think it affected how the stock performed."

    After a lackluster 2021, Amazon's stock may have an easier time this year.

    The company will face easier year-over-year comparisons after growth moderated in 2021, said Guggenheim analyst Seth Sigman. Amazon may also start to reap the benefits of some of its pandemic-related investments in supply chain and logistics over the last two years, Sigman said.

    "Our expectation is that growth should reaccelerate in 2022 after the moderation we saw in the last few quarters," said Sigman, who has a buy rating and a ,300 price target on Amazon shares.

    There are multiple hangovers from last year that could still weigh on Amazon's stock in 2021, like inflationary pressures, supply chain constraints and labor challenges, Forte said.

    Still, several analysts have named Amazon as a top pick for the year, including Jefferies, Bank of America Global Research, RBC Capital Markets and Goldman Sachs, citing expectations for a rebound in its ecommerce business.

    WATCH: Amazon is our top tech pick for 2022, says Jefferies' Brent Thill

    longforecast.com

    Averaged Amazon stock price for month 3650. Price at the end 3882, change for November 17.00%. Amazon stock predictions for December 2021. The forecast for beginning of December 3882. Maximum value 4321, while minimum 3831. Averaged Amazon stock price for month 4028. Price at the end 4076, change for December 5.00%.

    2021/12/23. Amazon stock predictions for next months and years.

    Amazon stock price predictions for December 2021.
    The forecast for beginning of December 3444. Maximum value 3579, while minimum 3173. Averaged Amazon stock price for month 3393. Price at the end 3376, change for December -1.97%.

    Amazon stock predictions for January 2022.
    The forecast for beginning of January 3376. Maximum value 3531, while minimum 3131. Averaged Amazon stock price for month 3342. Price at the end 3331, change for January -1.33%.

    Year Mo Min Max Close Total%
    2021 Dec 3173 3579 3376 -1.97%
    2022 Jan 3131 3531 3331 -3.28%
    2022 Feb 3250 3664 3457 0.38%
    2022 Mar 3284 3704 3494 1.45%
    2022 Apr 3340 3766 3553 3.16%
    2022 May 3492 3938 3715 7.87%
    2022 Jun 3524 3974 3749 8.86%
    2022 Jul 3700 4172 3936 14.29%
    2022 Aug 3780 4262 4021 16.75%
    2022 Sep 3969 4475 4222 22.59%
    2022 Oct 3987 4497 4242 23.17%
    2022 Nov 4058 4576 4317 25.35%
    2022 Dec 4165 4697 4431 28.66%
    2023 Jan 4213 4751 4482 30.14%
    2023 Feb 4424 4988 4706 36.64%
    2023 Mar 4500 5074 4787 39.00%
    2023 Apr 4607 5195 4901 42.31%
    2023 May 4837 5455 5146 49.42%
    2023 Jun 5079 5727 5403 56.88%
    2023 Jul 5333 6013 5673 64.72%
    2023 Aug 5600 6314 5957 72.97%
    2023 Sep 5880 6630 6255 81.62%
    2023 Oct 5955 6715 6335 83.94%
    2023 Nov 6066 6840 6453 87.37%
    2023 Dec 6369 7183 6776 96.75%

    Amazon stock price predictions for February 2022.
    The forecast for beginning of February 3331. Maximum value 3664, while minimum 3250. Averaged Amazon stock price for month 3426. Price at the end 3457, change for February 3.78%.

    Amazon stock predictions for March 2022.
    The forecast for beginning of March 3457. Maximum value 3704, while minimum 3284. Averaged Amazon stock price for month 3485. Price at the end 3494, change for March 1.07%.

    Amazon Stock Forecast For Tomorrow, Week, Month.

    S&P 500 Forecast 2022, 2023, 2024.

    Amazon stock price predictions for April 2022.
    The forecast for beginning of April 3494. Maximum value 3766, while minimum 3340. Averaged Amazon stock price for month 3538. Price at the end 3553, change for April 1.69%.

    Amazon stock predictions for May 2022.
    The forecast for beginning of May 3553. Maximum value 3938, while minimum 3492. Averaged Amazon stock price for month 3675. Price at the end 3715, change for May 4.56%.

    Amazon stock price predictions for June 2022.
    The forecast for beginning of June 3715. Maximum value 3974, while minimum 3524. Averaged Amazon stock price for month 3741. Price at the end 3749, change for June 0.92%.

    Amazon stock predictions for July 2022.
    The forecast for beginning of July 3749. Maximum value 4172, while minimum 3700. Averaged Amazon stock price for month 3889. Price at the end 3936, change for July 4.99%.

    Amazon stock price predictions for August 2022.
    The forecast for beginning of August 3936. Maximum value 4262, while minimum 3780. Averaged Amazon stock price for month 4000. Price at the end 4021, change for August 2.16%.

    Amazon stock predictions for September 2022.
    The forecast for beginning of September 4021. Maximum value 4475, while minimum 3969. Averaged Amazon stock price for month 4172. Price at the end 4222, change for September 5.00%.

    Amazon stock price predictions for October 2022.
    The forecast for beginning of October 4222. Maximum value 4497, while minimum 3987. Averaged Amazon stock price for month 4237. Price at the end 4242, change for October 0.47%.

    Amazon stock predictions for November 2022.
    The forecast for beginning of November 4242. Maximum value 4576, while minimum 4058. Averaged Amazon stock price for month 4298. Price at the end 4317, change for November 1.77%.

    Amazon stock price predictions for December 2022.
    The forecast for beginning of December 4317. Maximum value 4697, while minimum 4165. Averaged Amazon stock price for month 4403. Price at the end 4431, change for December 2.64%.

    Apple Stock Forecast 2022, 2023, 2024.

    Tesla Stock Forecast 2022, 2023, 2024.

    Amazon stock predictions for January 2023.
    The forecast for beginning of January 4431. Maximum value 4751, while minimum 4213. Averaged Amazon stock price for month 4469. Price at the end 4482, change for January 1.15%.

    Amazon stock price predictions for February 2023.
    The forecast for beginning of February 4482. Maximum value 4988, while minimum 4424. Averaged Amazon stock price for month 4650. Price at the end 4706, change for February 5.00%.

    Amazon stock predictions for March 2023.
    The forecast for beginning of March 4706. Maximum value 5074, while minimum 4500. Averaged Amazon stock price for month 4767. Price at the end 4787, change for March 1.72%.

    Amazon stock price predictions for April 2023.
    The forecast for beginning of April 4787. Maximum value 5195, while minimum 4607. Averaged Amazon stock price for month 4873. Price at the end 4901, change for April 2.38%.

    More Stock Forecasts...

    Amazon stock predictions for May 2023.
    The forecast for beginning of May 4901. Maximum value 5455, while minimum 4837. Averaged Amazon stock price for month 5085. Price at the end 5146, change for May 5.00%.

    Amazon stock price predictions for June 2023.
    The forecast for beginning of June 5146. Maximum value 5727, while minimum 5079. Averaged Amazon stock price for month 5339. Price at the end 5403, change for June 4.99%.

    Amazon stock predictions for July 2023.
    The forecast for beginning of July 5403. Maximum value 6013, while minimum 5333. Averaged Amazon stock price for month 5606. Price at the end 5673, change for July 5.00%.

    Amazon stock price predictions for August 2023.
    The forecast for beginning of August 5673. Maximum value 6314, while minimum 5600. Averaged Amazon stock price for month 5886. Price at the end 5957, change for August 5.01%.

    Amazon stock predictions for September 2023.
    The forecast for beginning of September 5957. Maximum value 6630, while minimum 5880. Averaged Amazon stock price for month 6181. Price at the end 6255, change for September 5.00%.

    Amazon stock price predictions for October 2023.
    The forecast for beginning of October 6255. Maximum value 6715, while minimum 5955. Averaged Amazon stock price for month 6315. Price at the end 6335, change for October 1.28%.

    Amazon stock predictions for November 2023.
    The forecast for beginning of November 6335. Maximum value 6840, while minimum 6066. Averaged Amazon stock price for month 6424. Price at the end 6453, change for November 1.86%.

    Amazon stock price predictions for December 2023.
    The forecast for beginning of December 6453. Maximum value 7183, while minimum 6369. Averaged Amazon stock price for month 6695. Price at the end 6776, change for December 5.01%.

    Taking Stock Of Amazon’s Down Week As The Market Headed Up

    07-01-2021 · If there was any fundamental news that would explain why Amazon’s stock underperformed the S&P 500 by 5%, then it was either well hidden or nonexistent. If nonexistent, then the underperformance ...

    07-01-2021

    Investors, take note. During the first trading week of 2021, Amazon’s AMZN stock slid by 2.8%, even as the S&P 500 rose by 2.7%. What are we to make of this, given that Amazon’s stock increased by more than 64% over the course of 2020, a year in which the S&P 500 rose by about over 16%? What are we to make of this against the backdrop of a pandemic and Presidential-incited mob assault on the U.S. Capitol building?

    UKRAINE - 2020/10/29: In this photo illustration an Amazon index displayed on a smartphone screen. ... [ ] Stock market indexes sharply dropped as investors nervously looked at elevating coronavirus case counts in the US and Europe, as media reported. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)

    SOPA Images/LightRocket via Getty Images

    Stock prices are driven by a combination of sentiment and fundamentals. In this post, I offer a few insights about how sentiment and fundamentals have influenced and will influence the long term performance of Amazon’s stock.

    Let me begin with the first trading week of 2021. If there was any fundamental news that would explain why Amazon’s stock underperformed the S&P 500 by 5%, then it was either well hidden or nonexistent. If nonexistent, then the underperformance was, of course, a manifestation of sentiment.

    Consider a hypothetical question. Suppose that at the end of 2010, Jeff Bezos took Amazon private, paid book value to do so, and continued to run the company exactly as he subsequently did. In this hypothetical, there is an important difference between Amazon being public and being private. If private, Jeff Bezos would have earned annual returns on his Amazon holdings from the cash generated by Amazon instead of the appreciation associated with the trading of its stock on public markets.

    Given that information about 2020 is still incomplete, I will focus on financial data through the end of 2019. Between the end of 2010 and the end of 2019, Jeff Bezos actually earned an average annual return of 30% by holding his publicly traded Amazon stock. If instead, he had received the average return on equity for that period, based only on Amazon’s earnings, he would only have earned 10%.

    The difference between 10% and 30% is large, and it is important to understand the degree to which the difference reflects investors’ expectations about Amazon’s performance going forward. That difference does not necessarily imply that Amazon’s stock is overvalued on fundamentals. Indeed, Amazon’s return on equity rose substantially in 2016, climbing above 10% for the first time in five years, and then in 2018 and 2019 climbing above 20%.

    To gain some insight into forecasts of Amazon’s future cash flows, consider the opinions of some of the key analysts who follow Amazon. I focus on sell side reports written by analysts at four firms. The four firms, all of which provide long term forecasts of Amazon’s free cash flow, are: Cowen, Credit Suisse CS , Jefferies, and SunTrust Robinson.

    Amazon’s closing price on January 8 was ,183. The corresponding target prices for the four firms ranged from a low of ,400 for SunTrust Robinson to a high of ,150 for Cowan. The SunTrust Robinson target price corresponds to a return of 7%, while the Cowan target price corresponds to a return of 30%. The beta for Amazon stock is about 1.2, which suggests an expected return, for a fairly valued stock, that is much closer to 7% than to 30%.

    All four sell side analysts provide opinions about what they consider to be Amazon’s weighted average cost of capital. These opinions range from 9% for Jefferies to 10.5% for Credit Suisse. The other two firms use 10% as Amazon’s cost of capital.

    The range of estimates for Amazon’s cost of capital is reasonably tight. Keep in mind that that cost of capital represents investors’ best estimate of the future annual return to Amazons’ investors in a fairly valued market, meaning the combination of stock holders and debtholders. In terms of book value, Amazon is roughly 50-to-60% equity financed. However, its price-to-book ratio is about 20, and so in market value terms, Amazon is mostly equity financed.

    Historically speaking, has Amazon consistently generated a return on invested capital (ROIC) that is at least 9%? For 2011 through 2019, the answer is no, as Amazon’s ROIC was about 6%. However, in 2018, Amazon’s ROIC jumped to 14% in 2018 and to 11% in 2019. Those jumps were significant, and came to be reflected in the market return to its stock.

    Here is something important to recognize for how investors view the long term prospects of Amazon. Implicit in all four analysts’ calculations is Amazon being able to generate a long term ROIC in excess of its cost of capital. By long term, I mean the time period after 2025. In this regard, all four analyst firms agree that roughly 80% of Amazon’s fundamental value derives from the company’s performance after 2025. This is in spite of the focus of most other analysts covering Amazon being on the period before 2025.

    It is conceivable that Amazon will be able to earn superior ROIC for the next several years. But the next few years is not the long term. Investors need to keep in mind that Jeff Bezos will not be Amazon’s chief executive forever. In addition, without possessing a competitive advantage, it is almost impossible for most firms to earn more than their cost of capital in the long term.

    One other thing. Analysts at Cowan and Credit Suisse assume that Amazon will be able to generate robust growth in free cash flows while shrinking their net fixed assets over time. In the short term, it is possible to do so, by incurring depreciation charges in excess of capital expenditures. Indeed, Amazon did so in 2015, 2016, 2018, and 2019. However, doing so in the long-run, meaning every year after 2025, is another matter.

    The improvements to Amazon’s ROIC in 2018 and 2019 occurred because for the period 2011 through 2019, Amazon stepped up its capital expenditures. Specifically, the ratio of its capital expenditures to unlevered cash flows during this period was 55%, sharply up from the prior decade when it was 18%. Investors should view, with great suspicion, long term forecasts of robust free cash flow growth that occur while net fixed assets decline to zero.

    Firms that consistently earn more than their cost of capital become targets not just for competitors, but also for regulators. Regulators in both the U.S. and the European Union have their sights on Amazon for monopolistic behavior. Whether justified or not, these regulatory initiatives will make it difficult to maintain ROIC above the cost of capital in the long run, because they will dampen Amazon’s competitive advantage.

    Behavioral economists use the term sentiment to mean investors mis-reacting to information about fundamentals. Because in the short-term sentiment effects can be large and distortionary, short term investing is largely about betting on sentiment. Sentiment is much more volatile than fundamentals, and that volatility both reflects and supports wide dispersions in beliefs about where Amazon’s stock is headed over the next twelve months. Among all 46 sell side analysts following Amazon, the range of target prices is ,048 to ,500.

    Time will tell where Amazon’s stock ends 2021 relative to the target price range. At some point after 2021, Amazon’s fundamentals will likely catch up with its stock price. Time will tell whether Amazon will be able to beat the odds in the long run, and earn a return on invested capital in excess of its cost of capital. Investors would be well served to keep both issues on their radar screens.

    Amazon’s High Flying Stock May Drop By As Much As 15%

    12-08-2020 · Amazon.com Inc.’s (AMZN) stock has stalled out despite reporting blistering second-quarter results that easily beat investor and analysts’ expectations. Still, the shares have struggled to ...

    12-08-2020

    Amazon.com Inc.’s (AMZN) stock has stalled out despite reporting blistering second-quarter results that easily beat investor and analysts’ expectations. Still, the shares have struggled to climb, and now maybe heading lower based on some options bets and the technical charts. A pullback could even result in the stock falling by as much as 15%.

    The stock’s valuation makes it susceptible to a pullback, given it is trading at a very historically high level –nearly four times forward sales estimates. What seems most surprising is that the multiple has not come down much despite analysts’ meaningfully upping their revenue estimates for the company.

    The technical chart may illustrate it the best as the stock is approaching an uptrend line that dates back to nearly the lows in mid-March. But more recently, the equity has formed a downtrend, which serves as a level of resistance since peaking on July 13. Additionally, the relative strength index is trending lower, a sign that bullish momentum has turned bearish, and that Amazon may break that March uptrend.  Finally, volume levels have been falling since peaking in mid-July, and that is an indication that the number of buyers is thinning.

    Should Amazon drop below ,100, breaking the uptrend, it could result in the shares falling to support in a region of ,600 to ,800, amounting to a drop of 12% to 15%.

    Amazon technical chart

    Tradingview

    Recent options trades seem to suggest that the upside in Amazon is limited. Open interest levels for the September 18 ,150 calls and puts increased by about 1,000 contracts a piece on August 13. Digging into the trades, we find that the calls were sold for 9.85, while the puts were bought for about 3.85. Overall, it creates a spread transaction, where a trader is betting that Amazon is below ,150 by the expiration date in September.

    Valuation At Extreme Levels

    The pessimism around Amazon may be because the stock has been on an epic run, with the shares nearly doubling off their March lows, compared to an S&P 500, which has advanced by almost 55% over the same time. That massive advance has pushed Amazon’s forward price to sales multiple to its highest level since the early 2000s, at roughly 3.9.

    Amazon's price to sales multiple

    Refinitiv Datastream

    The significant valuation comes despite analysts sharply raising their sales estimates for the company. Analysts now see the company generating revenue of 8.0 billion in 2020 up from 7.8 billion before its July results. Meanwhile, for 2021 and 2022, analysts estimate revenue of 4.0 billion and 4.5 billion, up from 9.4 billion and 8.4 billion, respectively.

    Amazon analysts' revenue estimates

    Thomson Reuters

    But with the next round of quarterly results not until some time in the middle of October. It would seem that momentum is going to drive the direction of the stock. However, given the equities massive gains since March, a pullback would not only be healthy, it should be welcomed, as it would create a potentially tremendous long-term opportunity.

    Michael Kramer is a financial market strategist and the portfolio manager of the Mott Capital Thematic Growth Portfolio.

    Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future results.

    Why Amazon Stock Is Your Best Shot At Being an E-Commerce ...

    14-09-2020 · Yet, today we can view it as one of Amazon’s most successful ventures. It’s the sort of forward thinking that’s behind all of the greatest growth stocks. In that regard, it’s similar to ...

    14-09-2020

    Want to get rich like Jeff Bezos? I certainly can’t guarantee that you’ll every achieve the wealth of the famous Amazon (NASDAQ:AMZN) CEO. However, taking a well-timed position in AMZN stock shares could be quite lucrative over the long haul.

    Amazon (AMZN) logistics center in Szczecin, Poland.
    Source: Mike Mareen / Shutterstock.com

    In fact, there aren’t many better ways to invest like an e-commerce tycoon than owning shares of AMZN stock. Yet, some folks will contend that the stock price is just too high. Sometimes they’ll wait for a dip in the share price, only to hesitate when it actually happens.

    So here we are in September, and you got the dip you’ve been waiting for. Moreover, Amazon is a dominant company that’s constantly expanding into new ventures. Over the years ,it has continued to see the kind of success you’d expect from the stocks in Growth Investor.

    What more could you want, really?

    AMZN Stock at a Glance

    At the beginning of September, AMZN stock was riding high on a wave of bullish sentiment. The rebound off of the mid-March lows was truly a sight to behold. But then, no stock goes up in a straight line and there will inevitably be minor corrections along the way.

    Thus, while AMZN stock was above ,500 per share on Sept. 2, it dropped quickly and nearly closed at ,100 on Sept. 11. Traders of this stock really hadn’t seen a drop of that magnitude since AMZN bottomed out in March.

    One can only imagine that some novice investors must have been shaken out during this price dip. That’s unfortunate as moderate corrections can be scary, but they’re just part of the process. Much of the time, it’s due to institutional investors taking profits after a steady run-up in the stock price.

    In other words, we shouldn’t assume that the price dip means there is actually something wrong with the company. If anything, it’s a good time to jump on the escalator, so to speak, as AMZN stock is still trending upwards overall.

    Some Food for Thought

    When Amazon bought out Whole Foods, this move might have been considered speculative at the time. Yet, today we can view it as one of Amazon’s most successful ventures. It’s the sort of forward thinking that’s behind all of the greatest growth stocks. In that regard, it’s similar to what I call the “AI Master Key,” only the growth narrative for that stock is just beginning — it’s bound to ignite in the coming years.

    “Grocery delivery continues to be one of the fastest-growing businesses,” Amazon stated recently. And now, the company is combining the grocery business with what the company does best: online order fulfillment.

    Specifically, Amazon is opening an online-only Whole Foods grocery store in Brooklyn, New York. Amazon commented, “We’re thrilled to increase access to grocery delivery. It’s never been more important.”

    It will be important for the local economy, no doubt. That’s because Amazon hired hundreds of workers who, according the company, will be “100 percent dedicated to facilitating grocery delivery.”

    New Geographies, New Opportunities

    Even beyond the move into online grocery order fulfillment, Amazon is also seeking to expand geographically. In particular, the company is reportedly in talks to possibly buy a -billion stake in Reliance Retail Ventures Ltd.

    That company is part of Indian conglomerate Reliance Industries. If the deal goes through as planned, Amazon could own a 40% stake in Reliance Retail Ventures. This, in itself, would diversify Amazon’s business in a big way and would turn a competitor into an ally.

    If the deal goes through, Amazon could profit from Reliance’s interests in supermarkets, consumer electronics, fashion outlets and more. This wouldn’t be Amazon’s first investment in Indian businesses, but it would be a major coup in an emerging market with a very large population.

    The Takeaway

    If you’ve been sitting on the sidelines to buy a AMZN stock, now’s as good an entry point as you’re probably going to get in the near future. It’s your chance to invest like an e-commerce tycoon, even if you don’t have Bezos’ bankroll.

    It’s no secret that AI stocks are among the hottest plays on Wall Street now … and Amazon stock is a proven winner in this group. But there’s another AI play that far too many investors are overlooking. Their oversight is your path to significant wealth.

    The “AI Master Key” is a lesser known machine learning leader that will revolutionize countless industries. From healthcare to agriculture, finance to cybersecurity, this company will be at the head of it all. It’s the key to unlocking the most significant technological revolution in human history and all the great profits that come with it.

    But that’s just the tip of the iceberg for Growth Investor subscribers. Backed by the strongest research team on the market and my innovative approach to investing, Growth Investor has outperformed the S&P by a factor of 3-to-1. It’s where you can find groundbreaking growth plays like my AI Master Key long before they become household names.

    On the date of publication, Louis Navellier had a long position in AMZN. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

    The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

    Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.

    Amazon Nears A Technical Breakdown That May Send The ...

    10-09-2020 · Amazon.com Inc. (AMZN) has not been immune to this decline, also falling by approximately 11%. However, the drop for Amazon may still grow worse as the stock breaks down on a technical basis. It ...

    10-09-2020

    Since the beginning of September, the technology sector as fallen sharply, with the Nasdaq 100 dropping by around 11 percent. Amazon.com Inc. (AMZN) has not been immune to this decline, also falling by approximately 11%. However, the drop for Amazon may still grow worse as the stock breaks down on a technical basis. It could result in the shares falling by as much as another 15% from its current levels to around ,800.

    Amazon's stock is not cheap, either. It trades at a very high premium on a price to sales basis, which has been something that analysts and investors have used to value the company in the past.

    Amazon vs. the NASDAQ 100 ETF

    Tradingview

    The technical chart shows the shares have fallen below a key uptrend, which has been in place since March 16. The stock first broke this uptrend on September 4 and then failed to retake it on September 10. The break of this uptrend is a significantly crucial bearish indication. Now the stock is sitting on a level of technical support at ,100. Should the stock fall below that level of technical support, it could drop to around ,800. There is the potential the stock falls even further, perhaps to as low as ,670. That would be a decline of about 15% from its price of roughly ,150 on September 11.

    Additionally, the relative strength index has been losing momentum after peaking at a reading above 70 in mid-July and trending lower since. The RSI now sits at around 44, which suggests that the stock is losing a lot of bullish momentum and that the shares may continue to drop towards those lower price levels.

    Amazon technical chart

    Tradingview

    Stunning Growth

    Analysts forecast robust earnings growth, rising by 37% in 2020 to .60 per share, and accelerating to 40% in 2021 and 42% in 2022. Revenue is estimated to be very strong, too, rising by about 31% in 2020 to about 7 billion, and an additional 18% in 2021 and 16% in 2022.

    Despite the significant earnings and revenue growth, the stock is not cheap by any stretch. It currently trades for around 72 times one-year forward earnings estimates, which is a very high multiple and above its average of about 65 over the past 20 years.

    Amazon PE ratio

    Refinitiv

    Additionally, the stock trades for a price to sales multiple on a one-year forward basis of around 3.9. That is well above its average of 1.97 over the past 20 years, and the upper end of the historical range. The only time the stock traded with a higher sales multiple was in October of 2003 when it reached four, and before that in late 2000, when it climbed over 4. The high multiple suggests that the stock is not cheap at his current price, despite the significant earnings growth down the road.

    Amazon price to sales ratio

    Refinitiv

    There is no doubt that Amazon is the premier E-Commerce company that will have revenue and earnings growth to push the stock price higher in the future. However, it does not mean that the stock is a little bit ahead of itself, currently, after having a tremendous run off the March lows, more than doubling in six months. It just means that the equity needs a period to consolidate and to find some firmer footing to build off of so that shares can push higher over the long-term.

    Michael Kramer is a financial market strategist and the portfolio manager of the Mott Capital Thematic Growth Portfolio.

    Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future results.

    AMZN Stock Should Have a Much Better 2022

    12-01-2022 · AMZN Stock by the Numbers. When you look at Amazon’s numbers in 2021, its important to keep its ridiculously successful 2020 in perspective. Amazon stock jumped 73% in 2020, versus a gain of 15 ...

    12-01-2022

    If there’s any big-name stock that disappointed investors in 2021, it’s Amazon (NASDAQ:AMZN) stock.

    Logistics activity on the Amazon site of Vélizy-Villacoublay in France. Packages are sorted by workers on coneyors.
    Source: Frederic Legrand - COMEO / Shutterstock.com

    But should you really be surprised by that? Probably not.

    Amazon had a ridiculously profitable 2020 for a tragic reason. The Covid-19 pandemic shut down brick-and-mortar stores across the country. Suddenly stuck at home and armed with government stimulus payments, shoppers turned to e-commerce in record numbers.

    But the world was a different – and better – place in 2021. Stores reopened. Kids went back to school. Workers started returning to their offices.

    And even as the omicron variant ravages the U.S. right now, there seems to be little interest in shutting down the country again. Most schools are still offering in-person learning. Jets are still zipping across the sky.

    That’s great for you and me. But that’s not so great, as it turns out, for AMZN stock.

    AMZN Stock by the Numbers

    When you look at Amazon’s numbers in 2021, its important to keep its ridiculously successful 2020 in perspective. Amazon stock jumped 73% in 2020, versus a gain of 15.3% for the S&P 500.

    So, the year-over-year comparisons for AMZN stock are really out of whack in 2021. Operating income in the third quarter was .9 billion, which was a drop from .2 billion in the third quarter of 2020.

    Net income also fell on a year-over-year basis, going from .3 billion and .37 per diluted share in Q3 2020 to .2 billion and .12 per share in the third quarter of 2021. Analysts had expected .92 per share in the quarter.

    Overall, the company’s revenue of 0.81 billion missed analysts’ expectations of 1.6 billion.

    As I’ve written previously, I’m not expecting Amazon to have a great fourth quarter, either. Q4 and full-year 2021 results will likely come out early next month.

    For the year, Amazon gained only 2.3% in 2021, while the S&P 500 rose more than 22%.

    Looking Ahead

    Does all this mean Amazon is a bad stock? Are the days of huge growth in the rearview mirror?

    I don’t think so.

    It’s important for investors not to overreact to the day-to-day news. We all eagerly look forward to those quarterly earnings reports so we can see if a company met expectations, blew them out of the water or fell short. But when we do that, we should also look at the big picture.

    Why are the numbers high or low? What’s going on in the world? And in Amazon’s case for the sake of this article, what kind of numbers are we comparing year-over-year performance?

    In 2020, Amazon consistently overperformed expectations because the pandemic created a unique situation. Then in 2021, it underperformed because experts consistently compared it to its 2020 performance and marveled that the company was purportedly losing ground.

    Now we’re in 2022. And later this spring, we’ll see Amazon’s Q1 earnings report that will be measured against how the company performed in the first quarter of 2021. And in that comparison, Amazon’s 2022 numbers are going to look pretty solid.

    Goldman Sachs is already on board the AMZN stock bandwagon. The investment bank says Amazon is its top internet stock for 2022. It says Amazon is “exposed to a multitude of broader secular growth themes, including e-commerce, advertising, cloud computing, media consumption and consumer subscription adoption” that should drive the share price higher in the next 12 months.

    And its not alone. Of the 47 analysts who cover AMZN stock, 43 currently list it as a “buy” or “strong buy.” The consensus price target is ,104, which represents 24% upside from today’s prices.

    The Bottom Line on AMZN Stock

    Amazon has already announced the company will take a billion charge in the fourth quarter from increased labor costs, productivity losses and inflation. Operating profit for Q4 will also likely suffer.

    But Amazon is more than just an e-commerce company. Its Amazon Web Services made .9 billion in the third quarter, which was more than AMZN made from its retail division. And that number will continue to grow, even if ecommerce continues to be challenged.

    Looking ahead to 2022 numbers, I’m expecting much better performance from Amazon this year. You won’t see 70% stock growth in 2022, but gains in the 25% to 30% range are surely reasonable.

    On the date of publication, Patrick Sanders 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.

    Patrick Sanders is a freelance writer and editor in Maryland, and from 2015 to 2019 was head of the investment advice section at U.S. News & World Report. Follow him on Twitter at @1patricksanders.

    Amazon Stock: Is It A Buy Amid Epic Battle With Walmart ...

    23-12-2021 · Is Amazon Stock A Buy Right Now? Amazon is working on a cup base with a 3,773.18 buy point. On a positive side the stock is trading back above its 50-day moving average.

    23-12-2021

    Amazon (AMZN) plans to build its first large-format retail stores, making a new foray into physical outlets and stepping up its battle against Walmart (WMT). Is Amazon stock a buy?

    X

    Amazon's 30,000-square-foot stores, which will debut in California and Ohio, are less than one-third the size of Walmart's conventional outlets. They're about one-sixth the size of Walmart Supercenter stores.

    Walmart, the behemoth of brick-and-mortar discount stores, is dueling Amazon, the giant of online shopping, in a battle over the future of retail, e-commerce and grocery shopping.

    Much work remains for either company to win the Amazon vs. Walmart battle. Walmart needs to expand online operations while also managing 11,500 stores across 28 countries, of which 4,743 are in the U.S. It's in the process of redesigning 1,000 stores by the end of 2021. Its goal is to create a more streamlined and faster shopping experience for customers.

    At the same time, Amazon must continue its aggressive rollout of warehouse distribution centers and figure out its strategy for building physical stores.

    Amazon Is Making Critical Investments

    "The key question from here is when/if does the current investment cycle drive evidence of share gains and margin leverage," RBC Capital Markets analyst Brad Erickson said in a note. "Only time will tell, but in our view AMZN stock is making critical investments as consumers increasingly demand faster shipping which should at least maintain share gains while, importantly, growing gross profit dollars."

    Amazon reported third-quarter results on Oct. 28. Adjusted earnings fell 51% from the year-ago period to .12 a share. Analysts expected .92 a share. Revenue climbed 15% to 0.8 billion, below expectations of 1.6 billion.

    For its fourth quarter, Amazon forecast revenue in the range of 0 billion to 0 billion. That missed analyst estimates for 2 billion. Amazon forecast earnings before interest and taxes, called EBIT, of

    .5 billion, versus estimates of .1 billion.

    The company's cloud-computing unit, Amazon Web Services, reported revenue growth of 39% to .6 billion. That topped estimates for 35% cloud-computing growth.

    Cowen analyst John Blackledge recently raised his price target on Amazon stock to 4,500, from 4,300. He listed Amazon as one of the "best ideas" for 2022, in the mega-cap category.

    Amazon Introduces Numerous New Gadgets

    On Sept. 28, Amazon introduced a plethora of consumer electronics gadgets, including smart displays and a home robot, at a fall product launch event.

    The Seattle-based e-commerce giant unveiled several devices that leverage its Alexa voice assistant technology. They include the Echo Show 15 smart display, which is designed to keep families organized, connected and entertained.

    Another Alexa-enabled device is Amazon's first robot, which is named Astro. The robot will act as a security guard, companion and mobile smart display. It brings together new advancements in artificial intelligence, computer vision, sensor technology, and voice and edge computing, the company said.

    Earlier this month, Amazon moved deeper into the television market with an all-new lineup of devices and its first Amazon-branded 4K smart TVs. The Amazon TV products go on sale in October. Amazon also introduced a 4K version of its Fire TV stick.

    Plenty Of Growth Opportunities

    Amazon entered 2021 with plenty of big growth opportunities. This included plans to expand its virtual health care program across the U.S. It is also expanding its prescription drug business.

    On March 17, Amazon announced that its telehealth pilot program, called Amazon Care, would expand to all of its U.S. employees and their families as well as other firms this summer. The program first launched at its Seattle headquarters 18 months ago.

    If Amazon can deliver more efficient health care services, the potential is enormous for fueling its growth engine — and by extension Amazon stock. Health care now comprises nearly a fifth of the U.S. economy.

    Amazon said the program enables workers to connect with medical professionals via chat or video conference, and connect patients with medical professionals. In addition, Amazon Care can dispatch a medical professional to a patient's home for additional care.

    Analysts at Jefferies give Amazon a buy rating and price target or 4,000.

    "We believe low expectations following two consecutive guide-downs better positions AMZN for upside in the core retail business," according to a Jefferies report.

    "We also see attractive growth at AWS and advertising, AMZN's two highest margin businesses, serving to more than offset near-term cost headwinds from labor shortages and supply chain disruption," it said.

    Tapping The Market For Prescription Drugs

    In addition, Amazon is tapping into the 0 billion market for prescription drugs. The company fired a big shot across the bow of drugstores and prescription drug wholesalers late last year when it launched Amazon Pharmacy. The new unit will offer Amazon Prime members discounts of up to 80% on generic drugs and 40% on brand medications.

    On May 26, Amazon announced it is acquiring iconic film studio Metro-Goldwyn-Mayer for .45 billion, looking broadly expand its position in streaming video and increase the value of its Prime rewards program. The acquisition is Amazon's largest since buying Whole Foods for .7 billion in 2017.

    To get Amazon Prime, users pay an annual or monthly fee for the service and receive multiple perks. This includes free access to Amazon Video and Amazon Music. Amazon has invested billions of dollars in its film and TV operations as well as live sports.

    Another growth vehicle for Amazon in 2021 is advertising. When looking for a product, about half of U.S. adults start their search with Amazon. More searches draw more advertisers. And as Covid-19 has caused more consumers to shop online that will keep Amazon's ad growth humming.

    Technical Analysis Of Amazon Stock

    In the stock market, timing is critical. So when you're looking for stocks to buy or sell, it's important to do the fundamental and technical analysis that identifies lower-risk entry points that also offer solid potential rewards.

    The IBD Stock Checkup tool shows that Amazon stock has an IBD Composite Rating of 72 out of 99.  When choosing growth stocks for the biggest potential gains based on the CAN SLIM investment paradigm, focus on those with a Composite Rating of 90 or higher.

    Its Relative Strength Rating is 62. The rating means that Amazon stock has outperformed 62% of all stocks in the IBD database over the past 12 months. Ideally, look for stocks with a rating of 80 or higher.

    Amazon is currently not a buy but is working on a cup base with a 3,773.18 buy point.

    If you're interested in buying large-cap stocks, in these articles you'll find technical analysis of leading large caps to see if they are in or near a proper buy zone.

    You'll also find alerts to warning signs and sell signals that show when to take your profits or cut short any losses. And, you'll discover if the current stock market trend is conducive to buying stocks, or if it's an environment where you want to take defensive action and sell.

    Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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    Tesla stock is tumbling. 4 reasons why

    23-02-2021 · Tesla, the hottest stock in the market for more than a year, has sunk into bear market territory.

    23-02-2021
    Tesla invests 
<div id=

    .5 billion in bitcoin" src="/image/empty.gif" data-src="https://cdn.cnn.com/cnnnext/dam/assets/201202115204-bitcoin-exlarge-169.jpg" >

    New York (CNN Business)Tesla, the hottest stock in the market for more than a year, has sunk into bear market territory.

    Shares of Tesla (TSLA) fell 6% Tuesday after closing down 8.5% Monday, wiping out its gains for the year. The stock closed at a record just above 3 on January 26 and has tumbled since. It fell low as 9 Tuesday, the first time Tesla shares have fallen below 0 since December 31.

    The steep decline has taken Tesla shares below their level when the company entered the S&P 500 on December 21. It also knocked CEO Elon Musk into the No. 2 position in the richest person on the planet list, behind Amazon (AMZN) founder Jeff Bezos. The two have been swapping positions repeatedly this year.

    Tesla's stock is selling off for several reasons:

    Tesla announced earlier this month that it had invested

    .5 billion in bitcoin. That helped feed the recent rally in bitcoin and by some estimates earned Tesla a quick

    billion profit — more than it has ever made from selling cars in a single year.

    But on Saturday, in response to a critic of Tesla's bitcoin investment, Musk tweeted that the prices of both bitcoin and another cryptocurrency called Ether "do seem high." That helped to send the price of bitcoin (XBT) down 9.3% in trading Monday, which may have helped to drag down Tesla shares.

    "Bitcoin is the smart move at the right time for Tesla in our opinion, but on the downside its playing with firecrackers and risks and volatility are added to the Tesla story," said Daniel Ives, tech analyst for Wedbush Securities, who remains bullish on Tesla shares.

    Model Y pricing

    Last Thursday, Tesla cut the price of the cheapest version of its Model Y and its best-selling Model 3 cars by ,000 each. That brought the price for the "standard range" Model Y, one that can travel 244 miles on a charge, to ,490 -- and the standard range Model 3 to ,590.

    But over the weekend, the cheapest "standard range" version of the Model Y disappeared from Tesla's sales site, leaving only the more expensive long-range and performance versions of the SUV. Tesla did not explain its decision.

    "We see the plausible reasons as either: the mix was skewed too much to the cheaper variant, and thus it was going to kill their margins, or more likely there just wasn't much demand for the lower variant," said Gordon Johnson of GLJ Research, one of the more bearish critics on Tesla shares. He said the recent price cuts and other price cuts show that Tesla vehicles do not have the demand that its fans claim.

    "Tesla can't keep its current factories running at capacity without ... price cuts," said Johnson in note on Monday.

    Increased competition

    Established automakers have recently set ambitious targets for their own EV sales.

    General Motors (GM) rolled out an SUV version of its Chevrolet Bolt a week ago, priced well below the Model Y, and announced it intends to sell only emissions-free cars after 2035. Ford (F) set an even more ambitious EV target for its European sales, saying all of the car models it sells there will be EVs by 2030.

    Apple (AAPL) is also considering partnering with an automaker to get into the car business, according to several news reports.

    Those efforts are making some Tesla investors nervous, said Ives, although he believes there will be enough of a shift to EVs for multiple winners among global automakers.

    Investors got ahead of themselves

    Tesla shares peaked one day before a disappointing earnings report on January 27 that fell short of forecasts from Wall Street analysts.

    The earnings showed that the money Tesla made from the sale of regulatory credits to other automakers outpaced its overall net income. Critics, like Johnson, said it's proof Tesla isn't able to make money building and selling cars (although by some other profit measures Tesla is profitable).

    During the earnings conference call on January 27, Musk also spoke about a shortage of batteries needed to power electric vehicles. He said that even with Tesla's own in-house supply of batteries and its planned expansion of battery production, the company is scrambling to find the batteries it wants to build more vehicles.

    "The fundamental limit on electric vehicles right now, in general, is total availability of [battery] cells," he said. For example, Musk said Tesla would have already started producing a semi-tractor if it had the batteries available to do so.

    Shares are still way up

    Tesla shares rose a market-leading 743% in 2020, as investors embraced the idea that the future of the auto industry would be electric. Tesla remains by far the most valuable automaker in the world, with a market value well above that of the eight largest automakers combined.

    Even with the recent decline. Tesla shares are up about 1,300% since October 2019, when it reported a third-quarter profit that surprised investors, sending shares on a tear.

    Some investors believe Tesla's stock flew too high. Yet many analysts believe Tesla will bounce back. Ives has a 12-month target price of 0.

    Even so, he has a warning: "It's 'buckle up the seat belt time' again for Tesla's stock with more volatility on the horizon," Ives said.

    Why Is Google Stock (NASDAQ:GOOGL) Down After Earnings?

    26-07-2017 · Why Is Google Stock Dropping? From time to time, investors lose faith in Google stock. If you look at the GOOGL stock price chart below, you’ll notice that it slowed considerably between 2005 ...

    26-07-2017

    Just as Alphabet Inc (NASDAQ:GOOGL) neared the

    ,000 mark, investors had a change of heart about the search giant. They knocked Google stock (GOOGL) down more than 2.5% after the company announced second-quarter earnings.

    Why, though?

    Google may be a gigantic tech giant, but it still manages more than 20% top-line growth each year. There aren’t too many companies that can brag about that kind of growth, especially if they are also profitable. Most companies burn bright and fast.

    But GOOGL stock is clearly not a flash in the pan. It is one of the most consistent performers on the stock market, continually moving up and to the right.

    More to the point, Google has the resources to buy growth. It started a highly active venture capital firm in 2009 called, unimaginatively, Google Venture Capital. GV has invested in more than 300 startups that could become the next mega-cap stock.

    Even at a one-percent success rate, Google is poised to get rich from the next era of technology giants, just like Yahoo! Inc. did with its early investment in Alibaba Group Holding Ltd (NYSE:BABA). The most valuable part of Yahoo! was its stake in BABA stock.

    Since Google is an early investor in Uber, Cloudera, Slack, Stripe, and Udacity, I think it will have a similar tailwind. But even if you push all this to the side, Google is still growing rapidly.

    Its 21% revenue growth in the last quarter was purely advertising-based. “Search” and “YouTube” were the biggest chunks of the pie, although I can’t say specifically how much each one represents. Google doesn’t break down its advertising revenue by product.

    But according to independent analysis, YouTube would be “worth at least .0 billion” if it were an independent company. It is an absolute behemoth.

    Why Is Google Stock Dropping?

    From time to time, investors lose faith in Google stock. If you look at the GOOGL stock price chart below, you’ll notice that it slowed considerably between 2005 and 2007. That is because investors believed Google stock had plateaued.

    They were wrong.

    In the aftermath of the 2008 financial crisis, everyone took a fresh look at market valuations. All companies with extra fat took a hit, as did overhyped startups with no road to profitability.

    But companies like Google prospered. The market was once again in love with strong fundamental performance, consistent growth, and sizeable earnings. With these metrics at the top of the priority list, it was easy for Google to rack up 540% returns.

    google stock chart

    Chart courtesy of StockCharts.com

    That said, the market is losing faith again.

    Investors believe that Google’s fundamentals will weaken over the next few years (despite the fact that it beat expectations this quarter). They are also upset at Google’s .7-billion penalty from the European Union’s competition bureau.

    As you might remember from a few weeks ago, the European Union decided (in its infinite wisdom) to charge Google with the crime of being successful. Perhaps that’s not exactly how they worded it, but that’s effectively what the charges amount to.

    The EU’s competition bureau fined Google .7 billion—that’s billion with a “b”—for leveraging its monopoly in the search market. They allege that Google prioritized its own Shopping network over rivals.

    While this is technically true, Google insists that its Shopping section is explicitly labelled as “promoted content” and therefore doesn’t have to be neutral.

    It’s not as if Google eliminates the competition’s results. Amazon is doing just fine regardless of whether Google take priority or not. But that’s besides the point.

    Google has an obligation to keep search queries neutral, because we all rely on its neutrality, but anything beyond search is fair game. And since promoted content does not interfere with the integrity of search results, the bureaucrats in Brussels should leave Google well enough alone.

    Apparently Google’s lawyers agree with me, because they are appealing the ruling. Either this means Google won’t pay the fine, or that they will use the appeal as leverage for ending two other investigations in Europe.

    As for Google’s fundamental strength, I think investors are overthinking it. They point to the fact that Google makes more money from desktop advertising than it does from mobile as a sign its gross margins will drop. I’m not buying it.

    People made the same argument about TV to online advertising. Yet we’ve seen the cost of TV ads drop and the value of online ads increase. Markets find their level, dear reader, so I wouldn’t worry about those issues too much.

    Conclusion

    The crucial factor is that Google maintains its monopoly on search while building out new revenue streams. Since the company is doing that so well with Waymo and DeepMind (its sister companies for driverless cars and artificial intelligence, respectively), I remain optimistic on the stock.

    The specific complaints are different, but I recognize the same disbelief that a company this big can’t be this good. It’s so much easier to believe that Google is going to slow down. But I don’t think that is true.

    I think the Google stock price will continue to climb past

    ,000,

    ,500, and even

    ,7500. In fact, I would not be at all surprised to see GOOGL stock hit ,000 at some point in the next decade.

    PayPal stock having worst day in 20 months on ...

    09-11-2021 · Tech. Politics. CNBC TV. Watchlist. Cramer. PRO. Menu. Tech. PayPal stock is having its worst day in 20 months after a disappointing revenue forecast. Published Tue, Nov 9 …

    09-11-2021
    Dan Schulman, CEO, Paypal speaking at the World Economic Forum in Davos, Switzerland, Jan. 23, 2020.

    PayPal shares plunged the most since the early days of the pandemic on Tuesday, after an earnings report in which the company cited consumer spending concerns and offered disappointing sales guidance for next year.

    The stock was off more than 11% as of early afternoon in New York. It's the steepest decline since March 16, 2020, when the spreading Covid-19 pandemic was forcing businesses to close down and cities and states to impose lockdowns, driving the worst day for the U.S. stock market since Black Monday in October 1987.

    Investors initially cheered PayPal's third-quarter earnings report, not because of the results, but because of a partnership the company announced between its Venmo payment app and Amazon. Starting next year, PayPal users will be able to make purchases on Amazon.com and the Amazon mobile shopping app with their Venmo accounts.

    However, that optimism quickly faded during the earnings call, when PayPal CEO Dan Schulman gave guidance for next year. The company said revenue for fiscal 2022 will increase about 18%, which would equal full-year sales of close to billion. Analysts were projecting revenue of .6 billion, according to Refinitiv.

    "We are seeing the impact of global supply chain shortages in our merchant base, consumer confidence is weakened with the absence of stimulus payments, and with the economy reopening, more people may be likely to do their holiday shopping in-store," Schulman said on the call.

    PayPal had already missed estimates on third-quarter revenue and lowered its forecast for the current year.

    The stock surged during in 2020 as consumers turned to e-commerce during the height of the pandemic. It's now down 14% in 2021, while the Nasdaq is up 23% for the year. Investors started turning bearish on PayPal last month following reports that the company was in late-stage talks to acquire social media app Pinterest.

    PayPal underperforming the Nasdaq

    PayPal later said that it wasn't looking to buy Pinterest. Schulman addressed the matter on Monday's call, without naming Pinterest.

    "Exploring all potential opportunities to enhance shareholder value is our responsibility," he said. "But obviously, only a select few deals will meet our very strict financial, strategic and capital allocation criteria."

    Multiple analysts lowered their price targets after the call.

    "PYPL was one of the pandemic's biggest beneficiaries, but the uneven global macro recovery amid supply chain issues as well as tough comps are challenging growth prospects," wrote analysts at D.A. Davidson, in a note to clients on Tuesday.

    The firm maintained its buy rating on stock while lowering its price target on to 5 from 5. The shares are currently trading around 1, their lowest in close to a year.

    JMP Securities also held its buy recommendation, but lowered its target to 0 from 0.

    "Our sense is that management may feel a bit snake bitten (as many have) by the abrupt turnaround in demand in many sectors, especially travel that accompanied the Delta variant surge," the JMP analysts wrote on Tuesday.

    They said the headwinds appear "transitory," extending just through early next year, and described the Amazon deal as a "potential game changer."

    In addition to macroeconomic concerns, PayPal is preparing for an eBay-less future. Six years after the companies split apart, eBay is in the process of transitioning sellers off PayPal and onto its own payment system. PayPal said volume on eBay marketplaces dropped 45% in the quarter and now represents less than 4% of revenue.

    In a report after PayPal's results, analysts at Wedbush Securities reduced their price target to 0 from 0, in part because they said the "eBay transition continues to impact healthy metrics." They maintained their buy rating on the stock.

    — CNBC's MacKenzie Sigalos contributed to this report.

    WATCH: PayPal's 25% growth is 'pretty impressive'