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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.

Why Amazon.com Stock Dropped Again Today

01-11-2021 · Shares of e-commerce giant Amazon.com ( NASDAQ:AMZN) stock took a hit Monday, falling 2.1% through 3 p.m. EDT. In the absence of bad news to explain the drop, I …

01-11-2021

Shares of e-commerce giant Amazon.com (NASDAQ:AMZN) stock took a hit Monday, falling 2.1% through 3 p.m. EDT.

In the absence of bad news to explain the drop, I am forced to conclude that Amazon stock is dropping today because of...good news.

Glowing red stock chart arrow trending down.
Image source: Getty Images.

So what

Specifically, the news that more than two years after it first revealed plans to build its own constellation of broadband internet satellites, Amazon is finally getting "Project Kuiper" off the ground. 

The news broke this morning: Amazon has hired space launch start-up ABL Systems to launch two Project Kuiper satellites "by Q4 2022" atop ABL's "all-new RS1 rocket." Amazon seems excited by the development. According to a statement on the Amazon News website: 

These satellites—KuiperSat-1 and KuiperSat-2—are an important step in the development process. They allow us to test the communications and networking technology that will be used in our final satellite design, and help us validate launch operations and mission management procedures that will be used when deploying our full constellation.

Over time, Amazon expects this to develop into "a long-term relationship" as ABL helps Amazon get the rest of its planned 3,236 satellites off the ground and into orbit around the Earth.

Now what

Now what could possibly be wrong with all that? Three problems spring to mind:

First and foremost, the fact that Amazon has chosen ABL as its partner emphasizes the fact that more than two decades after its foundation, Amazon founder Jeff Bezos's own space company, Blue Origin, which has no official connection to Amazon.com, still isn't capable of launching a satellite into orbit.

Second, the fact that Amazon is picking a 2022 launch date with ABL suggests Blue Origin still won't be able to reach orbit for more than a year. And the fact that Amazon has chosen to partner with a start-up with no history of successful rocket-launching creates the risk that these satellites won't launch even by 2022 on any rocket at all.

Third and finally -- and related to the first two reasons -- is the fact that Amazon is beginning this space race far behind its biggest rival in space, SpaceX. To date, SpaceX has launched more than 1,700 of its own Starlink satellites into orbit, helping to lift the company to a 0 billion market capitalization. Part of the reason SpaceX is worth so much, of course, is because it can use its own rocket ships to put its own satellites in orbit, dramatically lowering its costs in comparison to companies that cannot use their own rocket ships to put their own satellites into orbit.

Companies like Amazon.com.

So long as SpaceX retains this advantage, I fear Project Kuiper has little chance of success and is doomed to be a money pit for Amazon.com and its shareholders.

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.

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  • AMZN Stock | News | AMAZON Stock Price Today

    On the 20th anniversary of the IPO Amazon stock closed at 1.35, giving the company a market value of about 6.2 billion. That's 490 times its split-adjusted stock price. That's 490 times its...

    Loading..
    Date Open Close Daily High Daily Low

    Price change over selected period: 0% 0

    Total Analysts: 100

    Buy Ratings: 100 Neutral Ratings: 0 Sell Ratings: 0

    Analyst: {}
    Price-Target: {}
    Rating: {}

    Price *Price Target

    Lowest: 2,525.00 Median: 3,831.30 Highest: 5,500.00

      2021 2022 2023 2024 2025
    Revenue 470,482 552,785 649,083 733,947 836,771
    Dividend 0.00 0.00 0.00 - -
    Dividend Yield (in %) - - - - -
    EPS 41.11 51.37 76.68 110.21 147.56
    P/E Ratio 63.92 50.30 36.68 27.60 21.25
    EBIT 24,076 33,030 51,073 72,805 95,669
    EBITDA 68,967 83,413 107,521 138,339 170,050
    Net Profit 21,116 27,232 41,847 58,839 79,429
    Net Profit Adjusted 32,430 37,108 53,872 65,721 82,603
    Pre-Tax Profit 25,856 32,957 52,758 75,766 98,876
    Net Profit (Adjusted) 25,776 32,281 52,425 76,384 100,960
    EPS (Non-GAAP) ex. SOE 51.27 60.73 85.58 117.22 -
    EPS (GAAP) 41.11 51.37 76.68 110.21 147.56
    Gross Income 195,908 234,063 280,427 322,354 362,159
    Cash Flow from Investing -56,996 -56,022 -63,527 -54,875 -57,004
    Cash Flow from Operations 61,459 87,105 114,878 142,051 171,914
    Cash Flow from Financing 3,570 -4,842 -7,031 -625 0
    Cash Flow per Share 120.46 143.95 192.46 306.94 369.31
    Free Cash Flow 12,695 38,472 57,255 75,221 100,132
    Free Cash Flow per Share 26.61 64.71 99.23 171.01 224.67
    Book Value per Share 258.85 336.62 441.72 591.36 744.12
    Net Debt -19,483 -32,192 -69,461 -177,857 -252,230
    Research & Development Exp. 49,919 62,173 68,877 79,562 85,016
    Capital Expenditure 52,648 52,572 59,842 63,293 56,997
    Selling, General & Admin. Exp. 172,376 201,829 235,344 - -
    Shareholder’s Equity 126,306 169,016 233,250 306,484 411,449
    Total Assets 400,647 464,995 559,671 652,412 788,986
      Previous Quarter
    ending 09/30/21
    Current Quarter
    ending 12/31/21
    Next Quarter
    ending 03/31/22
    Current Year
    ending 12/31/21
    Next Year
    ending 12/31/22
    Earnings Estimates
    No. of Analysts 43 43 32 45 45
    Average Estimate 8.898 USD 3.747 USD 10.349 USD 41.115 USD 51.369 USD
    Year Ago 12.370 USD 14.090 USD 15.790 USD 41.830 USD 41.115 USD
    Publish Date 10/28/2021 2/3/2022 4/28/2022 - -
    Revenue Estimates
    No. of Analysts 41 41 30 44 43
    Average Estimate 111,551 USD 137,834 USD 121,877 USD 470,482 USD 552,785 USD
    Year Ago 96,145 USD 125,555 USD 108,518 USD 386,064 USD 470,482 USD
    Publish Date 10/28/2021 2/3/2022 4/28/2022 - -

    * Average Estimates in Million (e.g. Revenue) or per share (e.g. Dividend). Source: FactSet

    *Yield of the Respective Date

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    3,419.77

    2,669.00

    3,420.29

    93.00

    12/23/2021

    4:00 PM

    1.84 M

    3,421.37

    3,408.56

    1,790.87 B

    507.15 M

    3,403.00

    3,439.50

    2,881.00

    3,773.08

    0.00

    79.54

    86.63

    41.11

    258.85

    120.46

    Amazon. com, Inc. engages in the provision of online retail shopping services. It operates through the following business segments: North America, International, and Amazon Web Services (AWS). The North America segment includes retail sales of consumer products and subscriptions through North America-focused websites such as www. amazon. com and www. amazon.

    In 1997 when Amazon first filed for its initial public offering, the company was just three years old and had no clear path to profitability. It faced a growing list of competitors that included Simon & Schuster and Barnes & Noble, each of which was already selling books online. (read more)

    Risk

    Moody’s Daily Credit Risk Score is a 1-10 score of a company’s credit risk, based on an analysis of the firm’s balance sheet and inputs from the stock market. The score provides a forward-looking, one-year measure of credit risk, allowing investors to make better decisions and streamline their work ow. Updated daily, it takes into account day-to-day movements in market value compared to a company’s liability structure.

    Owner in %
    Freefloat 86.75
    The Vanguard Group, Inc. 6.40
    Vanguard Group, Inc. (Subfiler) 6.20
    Mackenzie T Bezos 3.44
    T. Rowe Price Associates, Inc. (Investment Management) 3.23
    State Street Corp. 3.22
    Fidelity Management & Research Co. LLC 2.43
    Vanguard Total Stock Market Index Fund 2.40
    BlackRock Institutional Trust Co. NA 1.85
    BlackRock Fund Advisors 1.67
    Geode Capital Management LLC 1.38
    Northern Trust Corp. 0.98
    Norges Bank (13F) 0.90
    Government Pension Fund - Global (The) 0.88
    Capital Research & Management Co. (Global Investors) 0.79

    Shareholder percentage totals can add to more than 100% because some holders are included in the free float.

    Name Job
    Dave Clark Chief Executive Officer-Worldwide Consumer
    Brian T. Olsavsky Chief Financial Officer & Senior Vice President
    Edith W. Cooper Director
    Randy Bradley Director
    Jeffrey P. Bezos Executive Chairman
    Joshua Huang Head-Business Development, Amazon Fresh Stores
    Ali Farahani Head-Physical Stores Real Estate Expansion
    Daniel P. Huttenlocher Independent Director
    Indra Krishnamurthy Nooyi Independent Director
    Jamie S. Gorelick Independent Director
    Judith A. McGrath Independent Director
    Keith Brian Alexander Independent Director
    Patricia Q. Stonesifer Independent Director
    Thomas O. Ryder Independent Director
    Wendell P. Weeks Independent Director
    Dave Fildes Investor Relations Contact
    Jonathan Jake Rubinstein Lead Independent Director
    Pietro Oriani Partner
    Andrew R. Jassy President, Chief Executive Officer & Director
    Steven Soloway Program Manager
    Joanthan Waldron Real Estate Head
    David A. Zapolsky Secretary, Senior Vice President & General Counsel
    Emily Iacolo Senior GIS Manager
    Ryan Slemons Senior Manager-Real Estate
    Charlie Lohr Senior Pre-Construction Manager
    Alexander Ragonese Senior Real Estate Manager
    Jeffrey A. Gaither Senior Real Estate Manager
    Stephen Smith Senior Real Estate Manager
    W. Paul Rowley Senior Real Estate Manager-Amazon 4Star, Books
    Amit Agarwal Senior VP & Country Manager-Amazon India
    Peter DeSantis Senior Vice President-AWS Infrastructure & Support
    Paul Kotas Senior Vice President-Advertising, Music & IMDb
    Tom Taylor Senior Vice President-Alexa Management
    David A. Limp Senior Vice President-Amazon Devices & Services
    Jeff M. Blackburn Senior Vice President-Business Development
    Jay Carney Senior Vice President-Corporate Affairs
    Alicia S. Boler-Davis Senior Vice President-Global Customer Fulfillment
    Beth Galetti Senior Vice President-Human Resources
    Russ Grandinetti Senior Vice President-International Consumer
    Doug Herrington Senior Vice President-North America Consumer
    Charlie Bell Senior Vice President-Utility Computing Services
    Lori Jordan Strategic Product Leader
    Peter A. Krawiec VP-Worldwide Corporate & Business Development
    Rohit Prasad Vice President & Head Scientist-Alexa
    Shelley L. Reynolds Vice President & World Wide Controller
    Kelly Jo MacArthur Vice President Legal & Associate General Counsel
    Matt Garman Vice President-AWS Sales & Marketing
    Mark Eamer Vice President-Advertising, Product & Media
    Ned Curic Vice President-Alexa Automotive
    Christine M. Beauchamp Vice President-Amazon Fashion
    Seth Dallaire Vice President-Global Advertising Sales
    Colleen Aubrey Vice President-Performance Advertising
    Neil Lindsay Vice President-Worldwide Prime & Marketing
    Amazon down? Current status and problems • Is The Service ...

    Current status for Amazon. Is the website down? Error signing in? Find out what is going on.

    • KeshavS62002264Keshav Sharma (@KeshavS62002264) reported

      @AmazonHelp They've not denied yet but the problem is they are not addressing my concern. It's been a week I've raised this but I've not received any response from them

    • DayJenne_day✨ (@DayJenne_) reported

      All of the gifts I waited till the last minute to buy no longer had the option to get it expedited, sooo if it wasn’t ordered on Amazon it won’t be here on time for Christmas. I also have yet to wrap one gift…… Idk what’s my issue this year but ima do better next year 😭

    • Rice_Ninja_🅹🆄🆂🆃🅸🅽🇨🇿 (@Rice_Ninja_) reported

      Thanks for taking my money and sending me an item that was broken out of the box @amazon :)

    • Anwesha77299461Anwesha (@Anwesha77299461) reported

      @AmazonHelp I can't understand properly,today night at about 12.30 am,they promised to call me within 3-4 min,still no call,I am very unhappy,solve the issue ASAP

    • BrijGapBrijGap (@BrijGap) reported

      @connpost Amazon are a **** show, I'm currently having a big issue with them. Someone at Amazon has taken a High value item I sent. Piss poor customer service.

    • KeshavS62002264Keshav Sharma (@KeshavS62002264) reported

      @AmazonHelp I received Noise watch from Amazon and now it's stopped charging.. I have already raised this issue with Noise but it's been more than a week , I'm not getting any resolution, can you help me in that ?

    • raphaelfabeniRaphael Fabeni (@raphaelfabeni) reported

      @AmazonHelp I just got an email about a safety issue related to an order I placed, but you are not saying what happened (you even asked to dispose of the product). What happened? On a phone call, one of the representatives told me to “go see a doctor.”

    • bijoyknd21Bijoy Kundu (@bijoyknd21) reported

      @AmazonHelp They have not solve my issue @XiaomiIndia @manukumarjain sir please do something

    • ArthurKuntlerArthur Kuntler 🏴‍☠️ (@ArthurKuntler) reported

      Interestingly, the final ep of wheel of time looks like even worse hammered **** than the first ep, with horrific 2005-ish "syFy" CGI, poor writing & terrible acting as well. Fascinating to see Amazon release something so poorly wrought

    • irhamzin1The Irham Zin (@irhamzin1) reported

      @embunkarinapoet I don’t have Astro… is it on Netflix? Amazon Prime? Oh, and have you watch Kaguya-sama on Netflix? It was taken down but now they put up season one only.

    • vinodgkulkarniVinod Kulkarni (@vinodgkulkarni) reported

      @AmazonHelp This is indeed a process loop problem in your systems. I have interacted about 5 times with support and requested return. It didn't succeed. In the meantime other returns have succeeded. Order ID is: 402-0204332-3085159 Senior managers shd note this peculiar problem!

    • RahulSa08751170Rahul Saini (@RahulSa08751170) reported

      @AmazonHelp Why customer needs to do again explain the same issue by chat, if i already explained it three times?

    • coinofstoneJen || Jaskier Simp Era (@coinofstone) reported

      I really enjoyed the first season and I would really like to read the first couple books before watching straight through again - but for everyone who hasn't read them, if you go back through Amazon's TERRIBLE UI there's these "origins" sequences that explain some stuff.

    • GiftoGabGift of Gab (@GiftoGab) reported

      @RonFilipkowski Well, unless their due date is over the weekend, good ol Amazon and Walmart have cribs, diapers, blankets and wipes available for delivery by Tuesday. So, sit down.

    • JerBoyceJerBoyce (@JerBoyce) reported

      Hey @amazon ordered an item for my niece and had it shipped to her. Got my delivery notification & delivery picture. One problem though, address and name listed on the package picture did not belong to my niece and her mother said they never received the item I actually ordered.

    • JennJDavies1Jennifer J Davies (@JennJDavies1) reported

      @AmazonHelp Im still having problems trying to pair the halo view with my bluetooth.

    • Madhuma06000982Madhumati (@Madhuma06000982) reported

      @AmazonHelp Mr Ateeb can you share my query with the team and resolve I am fed up since yesterday calling the given numbers the problem is the delivery person please tell them to connect with him I have shared the order number why is he not answering the call why always saying busy

    • K0sh111WasTakenDakota (@K0sh111WasTaken) reported

      @AmazonHelp I received that when I tried to sign in to the account after not being on it for a little. I do not recall exactly what the email had said when it happened, as it happened last year.

    • sarahskilesSarah Skiles (@sarahskiles) reported

      Any series able to do production on that scale and rebound after being shut down by a global pandemic gets a huge pass on not sticking the landing perfectly. It’s a herculean task to get ANY tv show made so kudos to the #WheelOfTime team But Amazon better up budget for s2

    • MrPhisnarusOrville P (@MrPhisnarus) reported

      @JerryRice One stop shop Jerry! log into several online stores ie: Amazon, check your list, buy & log off! No more panic buying at the mall! One problem, deliveries will be after Christmas :(

    • FinalArazome→Final← (@FinalArazome) reported

      @AmazonHelp They told me the replacement should arrive on the 26th but that's after Christmas... I feel like the first representative blew me off knowing the time to get the package initially was going to expire so it wasn't their problem anymore...

    • raphaelfabeniRaphael Fabeni (@raphaelfabeni) reported

      Hey @AmazonHelp. I just got an email about a safety issue related to an order I placed, but you are not saying what happened (you even asked to dispose of the product). What happened?

    • KamalSi37326034Kamal Singh (@KamalSi37326034) reported

      @AmazonHelp Sir link is not working please send link again

    • KingMidasAu1KingMidasAu (@KingMidasAu1) reported

      @MazieRick short sightedness "omg it isnt the amazon of crypto in 6 months wtf what a scam" just so absurd.Clearly so many newbies in this ecosystem which havent experienced all the growth issues no one has the licensing and backing we have for the future market,thats what counts imo

    • JonathanMHensonJonathan M Henson (@JonathanMHenson) reported

      @AjagiyaParth13 Once I was like, i can get the things I need if I just focus on my career at Amazon, I was able to chill a lot more, problem is I’d already done the damage by the time I realized that.

    • Madhuma06000982Madhumati (@Madhuma06000982) reported

      @AmazonHelp I am sorry but when I login through his account and password the pin goes on his number which is not reachable I hope you are understanding what I mean to say so the link is of no help to me I want the deilvery person to pick the phone we are trying through correct method help

    • Apoorva28SinghApoorva Singh (@Apoorva28Singh) reported

      How would you compensate for my loss of time and terrible experience? At least provide my refund. All other apps like @amazon @myntra have really good customer care.

    • chetanmalhotraChetan Malhotra (@chetanmalhotra) reported

      @AmazonHelp I have faced issue multiple time from #more store under #amazonfresh.

    • KimKPillWill🌈Kim Doesn't Sleep (@KimKPillWill) reported

      Amazon: It will be there today, it will be there today, we swear it will be there by 10pm no worries, it will really be there, no problems, count on us, it will be there, it's almost there.... Sorry. Our bad. We never shipped it so there's a delay.

    • sudeepkumar94sudeep Kumar sahoo (@sudeepkumar94) reported

      @AmazonHelp @amazonIN Again I have ordered the same item. Reached the same delivery center.Order is not in cancel state. Kindly provide facility to your delivery agents to deliver large parcels. You don't have proper escalation team who can resolve this issue.Before it gets cancelled again.

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    Why Shares of Amazon, Apple, and Meta Platforms Are ...

    24-01-2022 · Additionally, Amazon, Apple, and Meta Platforms investors are also processing two other bits of news that could be causing their stock prices to fall. The first is that some bond yields reached...

    24-01-2022

    Shares of Amazon ( AMZN 0.34% ), Apple ( AAPL -0.17% ), and Meta Platforms ( FB 1.12% ) were all sliding today as investors continue to dump technology stocks in anticipation that the Federal Reserve will raise interest rates throughout 2022.

    Today's drop comes as tech stocks have been tumbling since the beginning of this year as investors have processed information about rising bond yields as well.

    Amazon was down by 2.2%, Apple had dropped 2.7%, and Meta Platforms tumbled 2.8% as of 11:37 a.m. ET.

    So what 

    Technology stocks have been hit hard over the past couple of weeks as the Federal Reserve has indicated that it will begin raising interest rates this year, starting as soon as March. 

    A person looking at a phone in dismay.

    Image source: Getty Images.

    Rising rates can put pressure on consumer spending and also cause companies to borrow less money, which can hamper a company's growth. With interest rates expected to rise this year, some investors are worried that the rapid growth of tech stocks over the past couple of years may be coming to an end.

    Additionally, Amazon, Apple, and Meta Platforms investors are also processing two other bits of news that could be causing their stock prices to fall. 

    The first is that some bond yields reached nearly two-year highs last week. The two-year Treasury note topped 1% last week, the highest it's been in nearly two years. And the 10-year note hit 1.86%, the highest level since January 2020.

    The rates have since fallen a bit but still remain at elevated levels compared with last year. Higher bond yield rates generally hurt tech stock prices because it means that the company's future earnings will be worth less than they would have been if bond yields had remained lower. 

    Making matters worse is the fact that Netflix, one of the core FAANG stocks (of which Amazon, Apple, and Meta are also a part) has been tumbling since it released disappointing fourth-quarter results last week. Netflix is down 30% since the earnings release. 

    As a result of all of this, Amazon's stock is down nearly 16%, Apple has fallen 11%, and Meta Platforms has tumbled 12% since the beginning of this month. The broader market isn't doing much better, with the S&P 500 down 10% since the beginning of January.

    Now what 

    Amazon, Apple, and Meta Platforms investors may want to brace for a bit more volatility, at least in the short term. The Fed will finish its policy meeting on Wednesday, and any new information about interest rates that's released from that meeting could cause a market reaction.

    But long-term investors should be less concerned about what the Fed is doing. Nothing has fundamentally changed with Amazon's, Apple's, or Meta Platforms' underlying businesses over the past several weeks.

    Panic selling based on higher bond yields or rising interest rates could leave investors missing out on the long-term gains that investors with cooler heads could experience in the coming years.

    This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

    Why Amazon.com (AMZN) Stock Is Down In After-Hours Trading ...

    Why Amazon.com (AMZN) Stock Is Down In After-Hours Trading Today Amazon.com (AMZN) is falling after-hours Thursday after missing analysts' estimates for …

    NEW YORK (TheStreet) -- Shares of Amazon.com (AMZN) - Get Amazon.com, Inc. Report were falling 7.1% to 1 in after-hours trading on Thursday after missing analysts' estimates for earnings and revenue in the third quarter.

    The online retailer reported a loss of 95 cents a share for the third quarter, lower than the loss of 74 cents a share analysts surveyed by FactSet expected. Revenue grew 20.4% year over year to .58 billion for the quarter, falling below analysts' estimates of .84 billion for the quarter.

    Looking forward to the fourth quarter, Amazon expects to report revenue of .3 billion to .3 billion, representing growth of 7% to 18% from the year-ago quarter.

    STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

    TheStreet Ratings team rates AMAZON.COM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

    "We rate AMAZON.COM INC (AMZN) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow."

    You can view the full analysis from the report here: AMZN Ratings Report

    AMZN data by YCharts

    Image placeholder title

    STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

    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's Prime return policy is broken, and consumers …

    But as I learned over the weekend, returning stuff to Amazon isn’t as simple as it once was. Before, if you requested a return, Amazon would create a shipping label for you to print out, tape to the box, and then drop off at a UPS store. Convenient, cold, but extremely efficient. But things changed this year. An unnecessary trip to Kohl’s

    I hate going into department stores. I hate walking through aisles and inevitably looking at crap I don’t want or need. I hate asking underpaid staff for help (they’re overworked and I’m trying to avoid asking questions I’m sure they’ll find annoying).

    I hate waiting on long lines to check out and process returns. I have more patience for smaller stores — shops run by normal people just trying to make an honest living in a corporate world — because it's tough only getting a few customers a day while staring down rising rent.

    I don’t consider myself an anti-social person — I’m almost always the person to goad everyone at a party to do dumb shit or drink more than they should — but when it comes to shopping, I prefer the experience to be as cold, efficient, and human-free as possible. That’s why I prefer Amazon. Just let me buy the stuff I want whenever I want from wherever I want (you know what I’m talking about).

    But as convenient as Amazon is — I can get two-day delivery thanks to Prime — the behemoth is not without fundamental flaws. Jeff Bezos built Amazon into a multi-billion dollar global empire without fully understanding the consequences it would wreak on humanity and the planet.

    Wealthy-nation conveniences like Prime have put pressure on Amazon’s network of global fulfillment centers and have led to abusive working conditions. Reduced shipping times have clogged up delivery infrastructure; air and ground transports can’t keep up with the influx of shipping that Amazon had no choice but to lease fleets of airplanes to meet demand, strike a deal with USPS, and explore drone delivery systems. All of this has increased Amazon’s carbon footprint, which is definitely contributing to the planet warming up.

    In just 25 years, Amazon has made fast shipping its core product. Buying stuff on Amazon is so easy that one-click buying really should have an extra PIN or passcode requirement because I’m too trigger happy. Fast shipping, however, comes at the expense of simple returns. Whereas returning stuff was once as simple as printing out a prepaid label and dropping it off at UPS store, the process is more of a hassle today. As the year wraps up, you may find yourself making more returns thanks to the holiday gifting season… and, like me, maybe wondering why Amazon’s asking you to go to Kohl’s to do it.

    When I do make returns, I’ve come to expect the process will be as stress-free as possible

    I don’t make many returns to Amazon (or anywhere, really). My family didn’t have much growing up, and because of that, my mom made sure we understood the value of everything we bought. Every new item we got had to have a purpose and longevity because if it didn’t last, that would be it for a while. So I rarely make returns because if something is easily disposable or has no lasting value, I shouldn’t have bought it in the first place.

    But when I do make returns, I’ve come to expect the process will be as stress-free as possible, because life is hard enough already. Nobody wants to scroll to every retailer’s website footer page only to find the return policies are vastly different. A lot of that expectation was built by Amazon Prime, where return policies have been mostly consistent for years: free 30-day returns, with hassle-free label-making and shipping all in one spot. It’s one of the cornerstones that’s made Prime such a hit with consumers.

    But as I learned over the weekend, returning stuff to Amazon isn’t as simple as it once was. Before, if you requested a return, Amazon would create a shipping label for you to print out, tape to the box, and then drop off at a UPS store. Convenient, cold, but extremely efficient.

    But things changed this year.

    An unnecessary trip to Kohl’s

    Apparently, if you’re returning an item and it’s not defined as Amazon’s “fault,” you’re basically a trash person and as punishment, you’re directed to bring your item to a physical Kohl’s store. Some poor sucker at Kohl’s will pack and ship your returned item instead of you. Sounds simple enough — but why Kohl’s? They use similar distribution channels, Kohl’s desperately wants the foot traffic, and Amazon can cut down on its overhead.

    The partnership program is active in over 1,150 Kohl’s stores in 48 states. That’s a lot of stores… if you live in a city with many Kohl’s. I live in New York City with a population of over 8.5 million people — a city where there’s no Kohl’s in two of the densest boroughs, Manhattan and the Bronx. There’s one in Queens and one in Brooklyn, and they’re both way too far for anyone but locals to trek out to.

    It’s mind-boggling that Amazon recommends millions of New Yorkers go out of their way to drop off a return at a far-flung Kohl’s. A trip to Kohl’s from midtown Manhattan would take as long as one to the airport.

    Ain't nobody have time to trek out to Kohl's for an Amazon return.SOPA Images/LightRocket/Getty Images

    How is telling me to literally go find a Kohl’s store and wait in line to deal with a likely-unhappy customer service rep (you know how things get during holiday season) at all remotely aligned with the company’s e-commerce business, which thrives precisely because it provides a hassle-free shopping experience that doesn’t involve wasting time at a brick-and-mortar store? Sure, you get a 25 percent discount coupon off any Kohl’s purchase if you drag your butt over to a store to make an Amazon return, but is it worth it? I don’t think so.

    I shop at Amazon because I dislike antiquated retail experiences. A coupon to a store I prefer never to step foot in won’t sway me or most shoppers. Kohl’s CEO Michelle Gass told the New York Times in July the partnership with Amazon was already reaping benefits — specifically, it’s attracting younger customers.

    “What’s really key and what our data would suggest is that we’re also bringing in a new customer and we’re bringing in a younger customer,” Gass said. A quick poll of some of my younger friends and their even younger teenage pals suggests otherwise. None of them said they’d be caught dead at Kohl’s (or a TJ Maxx or JC Penney).

    A problem Amazon made

    I realize complaining about making returns at Kohl’s is a very specific, American problem. And optimists could even go as far to say the inconvenient policy might be an attempt (albeit a very soft one) by Amazon to discourage returning products, but we’re also talking about Amazon here.

    Two-day shipping is fucking magical, but Amazon has repeatedly shown how ruthless it is. Here are two perfect examples: 1) its insensitivity towards displacing a struggling community when it tried (and failed) to build a massive HQ2 in New York City that would have been funded by over

    billion in tax incentives and 2) it prioritized shipping efficiency and profits above worker safety as reported in this bombshell piece by Buzzfeed and ProPublica.

    Amazon's creating a fast shipping mess it can't keep up with when it comes to returns.Raymond Wong / Input

    I’m sure Amazon PR would be more than happy to say it’s trying to help reduce its carbon footprint by leveraging Kohl’s or put some other corporate spin on it, but if it wants to cut waste and cut costs, it needs to communicate to consumers why it’s doing what it's doing and what its expectations of customers really is. It doesn’t seem like Amazon’s keeping close tabs on which customers are abusing its return policy; there are some cases where Amazon has banned customers for high “return activity” but you rarely hear about them. Other retailers like Best Buy and Urban Outfitters are more vigilant on this front; if you make too many returns, you’re effectively flagged within its systems and barred from returning anything.

    Without any way to shame customers into not making tons of returns (like some kind of rating or something!) or clearer explanations and rules around returning products, there’s no reason to believe Amazon has made it a top priority to solve the problem its online shopping machine has created. It doesn’t help that we also know most returned products end up as part of random pallet crates that are then auctioned off. And just a note: further expanding free returns to “millions” of more products also explicitly suggests that curbing returns isn’t a priority at all for Amazon, in case the company was hoping we’d get some more subtle point it’s trying to make.

    Time for new rules

    My problem does have a solution, one that forces a consumer to abuse the service: you can lie. Yes, lie through your teeth so Amazon waives the cost of a UPS return. If you select “better price available” or “no longer needed” as your return option, there’s a very high chance Amazon will kick you over to a Kohl’s store or charge you for a UPS dropoff.

    Printing a label, packing the item, and dropping it off at a UPS dropoff is more expensive than having someone else handle shipping? Raymond Wong / Input

    But if you lie and select an option like “inaccurate website description” and make up a random reason — ta-da! — you can get a return label for free and drop it off at a UPS at your own convenience.

    The shipping fees are waived if you lie during the return process.Raymond Wong / Input

    I have no doubt I’m not the only Prime member abusing this loophole. The return policy is seemingly random and doesn’t make sense most of the time. Why does it cost me nothing to bring an item to a store and have them pack and ship it, but .26 if I want to use the box my item literally came in, print out the label with my own ink and paper, and then drop it off at UPS store or a drop-off box? It costs me more money to save time than it does to waste time waiting for a customer rep to do the work I could have easily done myself. Umm… what?

    According to consulting firm AlixPartners, it costs retailers twice as much to accept mailed returns versus in-store; a package can cost retailers up to if it’s returned in the mail compared to about if returned in-store. The logistics make sense and it’s hard to refute the fact that offering in-store returns can help Amazon and its partners save on costs. But if those costs are passed along to consumers, so Amazon’s margins continue to rise, it needs to make a clear change on how returns work for Prime products and let customers factor those changes into their purchasing choices.

    Amazon’s made a liar out of me. They’re white lies. But I’m still a slightly less honest man because Amazon, a company to which I pay 9 per year, refuses to treat me like the loyal, responsible customer I am. And I’m definitely not alone in that. Returning products is inherently bad — bad for the environment and bad for your sanity and all the people involved with processing it. It’s time for Amazon to rethink the rules.

    It’d be a herculean challenge for Amazon to undo the damage its free returns policy created (it should have thought of this earlier when the system was more manageable), but a necessary one to reverse the bad habits shoppers now have ingrained. Until then, expect making returns to be less convenient, especially in the next few weeks, as the busiest holiday shopping season on record turns into the busiest return season, too. There’s a cost to everything when you shop with Amazon, even when you throw money at it to make it go away.

    If forcing customers to visit Kohl's or a UPS store is Amazon’s indirect way of penalizing people for returning products, it needs a more explicit way of clamping down on its return policy. It’s impossible to try to backdoor-condition hundreds of millions of users with inconvenient return policies like going through Kohl’s.

    Here’s what I propose:

    • I think Prime members deserve free hassle-free returns that don’t involve a trip to Kohl’s. Non-members should be required to pay for their own return since they’re not paying recurring fees to maintain all the infrastructure.
    • Amazon should also impose a limit on the number of returns a customer can make during any period, and perhaps with a penalty if they surpass it.
    • Spell out why it’s kicking customers over to Kohl’s. A simple, direct and honest explanation during the online return process highlighting how in-store returns help cut down on shipping costs and reduce carbon footprint could provide enough of a feel-good attitude to convince customers to give it a shot.
    • In addition to partnering with Kohl’s, Amazon should expand the returns program and bring other physical retailers into the mix (I’m sure stores, big and small alike, would love more foot traffic).
    • Invest in the physical infrastructure it already has: Whole Foods; there are fewer Whole Foods in the U.S. (479), but I’m willing to bet most people would rather go to the supermarket than Kohl’s. I know I would since there are significantly more Whole Foods in New York City and they’re also easier to get to.
    • Limit instead of expand the number of products that come with free returns.

    These are just a few ways for Amazon to start rehabilitating its monstrous e-commerce machine. Amazon owes it to customers to bear responsibility for the fast-order-and-shipping convenience that it made mainstream. Saving on shipping costs is understandable for a struggling mom-and-pop shop, but Amazon earned billion in revenue in Q3 2019, an increase of 24 percent year-over-year. It can afford to use a chunk of all that money to create solutions that not only do right by its customers, but also the planet.

    4 reasons why Amazon stock is getting nailed

    Recall that a year ago at this time Amazon was posting mind-blowing sales gains as the pandemic kept consumers inside and ordering online to an extent never seen before. Amazon execs …

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    Why Is Amazon (AMZN) Down 9.3% Since Last Earnings Report?

    Amazon Web Services (“AWS”) revenues (10% of sales) rose 28% year over year to .7 billion. Robust performance delivered by Amazon during …

    A month has gone by since the last earnings report for Amazon (AMZN). Shares have lost about 9.3% in that time frame, underperforming the S&P 500.

    Will the recent negative trend continue leading up to its next earnings release, or is Amazon due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

    Amazon's Q4 Earnings & Revenues Beat Estimates

    Amazon.com reported fourth-quarter 2020 earnings of .09 per share, beating the Zacks Consensus Estimate by 99.8%. The bottom line also improved 117.8% from the year-ago quarter and 13.9% from the previous quarter.Net sales of 5.6 billion comfortably surpassed the Zacks Consensus Estimate of 0.4 billion and exceeded management’s guidance of 2-1 billion. Further, the figure increased 44% on a year-over-year basis and 30.6% sequentially.North America revenues (60% of sales) advanced 40.3% from the year-ago quarter to .3billion. International revenues (30% of sales) climbed 57.3% year over year to .5 billion. Amazon Web Services (“AWS”) revenues (10% of sales) rose 28% year over year to .7 billion.Robust performance delivered by Amazon during the holiday season drove top-line growth. Notably, it sold more than a billion products under the categories of toys, electronics, home, fashion, beauty and personal care across the world during the holiday shopping period.Moreover, the coronavirus pandemic-induced continuous surge in online shopping contributed well. We note that the company’s online store sales rose46% from the prior-year quarter.Additionally, strengthening relationships with third-party sellers remained a major positive. In the fourth quarter, sales generated by these sellers rose 57% on a year-over-year basis.Further, strong momentum across Prime members remained a tailwind. The company’s subscription services delivered robust performance during the reported quarter. Sales from these services went up 35% from the prior-year quarter.Furthermore, solid AWS momentum and strengthening smart devices offerings continued to benefit the company’s fourth-quarter performance.The company’s strong global presence, growing Prime momentum, expanding data center network and increasing number of AWS regions, improving Alexa skills, expanding smart devices portfolio, and growing efforts toward gaining strong traction among small and medium businesses are likely to drive its near-term financial performance.

    With the release of fourth-quarter results, the company also announced the transition in the role of Jeff Bezos to the position of Executive Chair. Notably, Jeff Bezoz will be stepping down from his current CEO role in third-quarter 2021 and Andy Jassy will become the new CEO.

    Retail & Prime Momentum

    Amazon’s aggressive retail strategies continued to benefit its fourth-quarter results. Expanding the fulfillment network and ultrafast delivery services contributed well.The opening of Amazon Fresh grocery stores in Irvine, CA, Schaumburg, IL, North Hollywood, CA, Ladera Heights, CA, Naperville, IL, Northridge, CA and Whittier, CA, bolstered the company’s physical retail presence as well as grocery retail footprints.Further, the unveiling of the online store for prescription medicines namely Amazon Pharmacy in integration with its PillPack buyout remained noteworthy. The store offers afree two-day delivery service to Prime members.Additionally, the company boosted its fashion retail efforts by introducing a service —Made for You, which allows shoppers to create a customized T-shirt according to their exact measurements.Further, a huge success in the company’s Great Indian Festival event contributed well. Notably, it witnessed strong momentum across small and medium businesses. Customers made purchases from above 110,000 such sellers during the event.Apart from this, solid momentum across Prime Video remained a major tailwind in the reported quarter. Expanding original content and overall content portfolio on Prime Video continued to accelerate the Prime engagement further.We note that Prime Video premiered new and returning seasons ofits original series and specials namely What the Constitution Means to Me, The Pack, Small Axe, Utopia, The Wilds, The Expanse, Yearly Departed, and the final season of Vikingsduring the reported quarter.Also, the company bolstered its original movie content library with Borat Subsequent Moviefilm, Uncle Frank, Sylvie’s Love, Sound of Metal and I’m Your Woman.Further, it strengthened its country-wise Amazon Originals content portfolio by streaming The Challenge: ETA, BILD.Macht.Deutschland?, FERRO, El Cid, Binge Reloaded, Truth Seekers, The Bachelorette, Mirzapur, Locaspor el Cambio, The Grand Tour: A Massive Hunt, and All or Nothing: Tottenham Hotspur.

    Additionally, Amazon witnessed strongest growth in its viewership forlive sports streaming in the reported quarter. Live streaming of San Francisco 49ers vs. Arizona Cardinals game, Premier League football, NFL regular season game, and Autumn Nations Cup tournament helped the company in attracting Prime members.

    Expanding AWS Portfolio: A Key Catalyst

    AWS, which witnessed solid growth in the topline, continued to gain strong customer momentum in the coronavirus-hit fourth quarter, courtesy of its highly reliable services portfolio.During the reported quarter, AWS rolled out a cloud-based healthcare service called Amazon HealthLake. Further, it unveiled Amazon DevOps Guru, which improves application availability by using ML services.Additionally, the company rolled out five industrial ML services namely, Amazon Monitron, Amazon Lookout for Equipment, the AWS Panorama Appliance, the AWS Panorama SDK, and Amazon Lookout for Vision.Further, AWS made Amazon Managed Workflows for Apache Airflow generally available. Furthermore, the company announced the general availability of AWS Network Firewall, which is a new service, well-equipped to protect against common network threats.Also, AWS unveiled Mac instancesfor Amazon Elastic Compute Cloud (Amazon EC2). Also, it introduced nine capabilities for Amazon SageMaker, five new capabilities for Amazon Connect and four new container services.Furthermore, the company rolled out Amazon QuickSight Q, AWS Glue Elastic Views and Aurora Serverless v2 among others.On the heels of expanding services portfolio, AWS experienced strong growth in its clientele with the addition of Thomson Reuters, Metro Goldwyn Mayer, ViacomCBS, Boom Supersonic, MercadoLibre, Zalando, Nationwide, Twitter, Star Alliance, Standard Chartered Bank, Arm Holdings, Zoom and Itau Unibanco, to name a few.

    Also, extended relationships with Carrier Global and BlackBerry remained positives.

    Alexa, Smart Devices Offering & Self-Driving Space

    Amazon continued to enhance the skills and features of Alexa in the reported quarter. Introduction of multilingual feature, new Alexa Routines on Fire TV, Alexa Custom Assistant, and a new capability that helps in making Alexa more natural remained positives.Further, Amazon made Ring’s new Mailbox Sensor generally available to customers. It also rolled out Customizable Motion Zones for all battery-powered Ring Video Doorbells and Security Cameras.Additionally, the company’s growing momentum across Fire TV, whose monthly active user base has exceeded the mark of 50 million, remained a tailwind. Also, winning content deals with streaming providers such as HBO Max, discovery , and Xfinity in the U.S., Disney in Mexico and Brazil, NOW TV in the UK and CANAL in France contributed well.

    Apart from these, Amazon gained strong traction in the autonomous driving space with the first look of Zoox’s fully functional, electric, autonomous vehicle.

    Quarter in Detail

    Product sales (56.6% of sales) increased 40.6% year over year to .1 billion. Service sales (43.4% of sales) rose 47.7% from the year-ago quarter to .5 billion.Operating expenses were 8.7 billion, up 42% from the year-ago quarter. As a percentage of revenues, the figure contracted 110 bps on a year-over-year basis to 94.5%.Cost of sales, fulfillment, technology & content, marketing and general & administrative expenses increased 46.9%, 51.5%, 23.7%, 19.9% and 39.4% to .3 billion, .5 billion, .05 billion, .4 billion and

    .9 billion, respectively, on a year-over-year basis.Other operating income was 6 million in the reported quarter compared to expenses of million in the year-ago quarter.Overall operating income increased 77.2% from the year-ago quarter to .9 billion. Further, the operating margin expanded 110 bps from the year-ago quarter to 5.5%.Operating income for AWS was .6 billion, up 37.3% year over year. Further, the same for North America improved 55.1% from the prior-year quarter to .9 billion.

    Further, the International segment reported an operating income of 3 million against a loss of 7 million in the year-ago quarter.

    Balance Sheet & Cash Flow

    As of Dec 31, 2020, cash and cash equivalents were .1 billion compared with .9 billion as of Sep 30, 2020. Further, marketable securities totaled .3 billion at the end of the fourth quarter, up from .5 billion at the end of the third quarter.Long-term debt was .8 billion in the reported quarter compared with .9 billion in the previous quarter.Further, the company generated .4 billion of cash from operation in the fourth quarter, which was up from .9 billion in the prior quarter.

    On a trailing twelve month basis, free cash flow came in at .02 billion in the reported quarter, up from .5 million in the prior quarter.

    Guidance

    For first-quarter 2021, Amazon expects net sales between 0 billion and 6 billion. The figure is anticipated to improve 33-40% on a year-over-year basis.Management projects a favorable foreign exchange impact of 300 bps.Proceeds from operational activities are likely to range from operating income of billion to .5 billion.

    This guidance is inclusive of more than billion costs related to COVID-19.

    How Have Estimates Been Moving Since Then?

    It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 12.92% due to these changes.

    VGM Scores

    Currently, Amazon has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

    Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

    Outlook

    Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Amazon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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    Zacks Investment Research

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    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.”

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    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".


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    Amazon falls after missing on earnings—what 6 experts are ...

    25-10-2019 · Amazon falls further after missing on earnings — here’s what 6 experts are watching now. It wasn’t exactly a prime showing. Amazon shares fell as much as 9% in after-hours trading Thursday ...

    25-10-2019

    It wasn't exactly a prime showing.

    Amazon shares fell as much as 9% in after-hours trading Thursday following its third-quarter earnings report, with the stock recovering to a 1.3% loss by Friday afternoon.

    The move was in part due to Amazon's return to investing heavily in its business, which weighed on profitability.

    Despite the initial plunge, experts don't think Amazon's next quarter — for which the e-commerce giant issued weaker-than-anticipated guidance — will play out as badly as feared.

    Here's what six of them said about the report:

    Tuna Amobi, industry analyst at CFRA, said Amazon's meaningful investment boost was something his firm "could live with":

    "This part quarter, [Amazon] spent billion on shipping. This current Q4, they're guiding for one-day delivery alone to impact the results by

    .5 billion, which is double what we saw in the third quarter. So, the trend line continues to increase. … The one-day delivery that we're seeing, I think, the data points that we see, kind of reassure us that it's actually the right step for the long term. Prime members are ordering more in terms of volumes, as well as value of the order, and the long-term economics of the one-day delivery so far seem to have justified the ratcheted investments that we're seeing. So, yes, the return to a heavy investment cycle is something that we can live with."

    Karen Finerman, co-founder and CEO of Metropolitan Capital Advisors, didn't find the stock particularly attractive, but she didn't think the earnings results changed the story:

    "Spend, spend, spend, right? They can afford to do it. … I don't think, if you're a bull and that's part of your thesis on the story, that anything that came out right now should change that. And they gave this guidance of [$]80 to [86.5] billion; that is an enormous range. So, they're just kind of throwing that out there. I wouldn't read that much into that as well. So, it's too expensive for me. This doesn't really change it [to], 'Oh, now it's in the range of excellent value,' so, it's not really my thing, but the thesis is intact."

    D.A. Davidson analyst Tom Forte said there was more to like in Amazon's report than people might think:

    "I definitely think you're seeing better performance out of Microsoft and then, to a lesser extent, out of Google, so it is a tougher competitive set for cloud. On the profit side, though, they still had more than a share in earnings, and the three big profit drivers besides [Amazon Web Services] as one are advertising and mix of third-party retail. So, yes, the deceleration sequential for cloud is concerning, but it's still a big profit driver along with third-party retail and advertising, and you still had four bucks-plus a share in earnings."

    Gene Munster, managing partner of Loup Ventures, said Amazon upping its investments was "absolutely" the right move:

    "How do I view it? It is absolutely the right thing for them to be in this investment mode. It's the right thing for them to push for consumers to think even more broadly about their wallet versus Amazon, and one day, as a powerful proposition around that. But ultimately, you need to continue to grow that base of Prime users. About two-thirds of the U.S. has Prime memberships. Now, ultimately, that could probably go to 75%. So, there is some room for upside. But it does get more difficult to continue to climb, and I think this all circles back to the core underlying question, which is what's the multiple you pay for that growth outlook? And my belief is we're probably fairly valued right now."

    Strategic Wealth Partners CEO Mark Tepper shared what he was telling his firm's clients:

    "This is one of our core holdings. I would look at this as a buying opportunity, so, I would expect probably a call from a client or two … to try and figure out what's going on. And, basically, what I'm going to tell them is a few things. No. 1, the weak guidance is pretty typical for Amazon. They are notorious for sandbagging their holiday projections and then just blowing right through them. Right now, they are investing from a position of strength, right? They've got a significant competitive advantage and they're spending money right now to continue to strengthen that competitive advantage, and it's still too cheap given the growth that this thing offers over the course of the next few years. I think fair value's [$]2200 to 2400 on Amazon."

    Jefferies analyst Brent Thill said Amazon is notorious for under-selling its forecasts:

    "Good Q3, bad Q4 guide. Again, the big investment in one-day deliveries really weighing on the story. There's no way they can offset these expenses. It's manual. You can't deliver packages any quicker or more efficiently, so many of the logistics experts continue to point to short term. There's a big investment mode. Amazon was going through harvest mode showing earnings upside, and now we're back into investment mode, and I think many investors are saying, 'Wait and see until they get out of this investment mode for these current investments to pay off.' Remember, typically, Amazon's pretty conservative. They did beat the top line and bottom line this quarter relative to our numbers, but, effectively, they've always given pretty conservative guidance, so our belief is that they'll surpass what they typically say. But that's going to continue to weigh on the short term given the investments they're making."

    Disclaimer

    Why Amazon.com (AMZN) Stock Is Declining Today

    Why Amazon.com (AMZN) Stock Is Declining Today Amazon.com (AMZN) stock is down after Apple (AAPL) unveiled its Apple Pay and iPhone 6 today, threatening Amazon's e-commerce platform and Fire Phone...

    NEW YORK (TheStreet) -- Shares of Amazon.com Inc (AMZN) - Get Amazon.com, Inc. Report are falling by 3.31% to 1 after Apple (AAPL) - Get Apple Inc. Report launched Apple Pay and two versions of the iPhone 6 in its launch event this afternoon, threatening Amazon's e-commerce mobile platform and its Fire Phone. 

    Apple Pay is a mobile payment system linked to a credit card that consumers can use by holding their iPhones to a payment device. 

    A number of financial institutions and retailers like Whole Foods Market (WFM) , The Walt Disney Company (DIS) - Get Walt Disney Company Report , and McDonald's Corp. (MCD) - Get McDonald's Corporation Report  have already signed on to accept the payment system which will be available starting next month.

    STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

    Separately, TheStreet Ratings team rates AMAZON.COM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

    "We rate AMAZON.COM INC (AMZN) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and feeble growth in the company's earnings per share."

    Highlights from the analysis by TheStreet Ratings Team goes as follows:

    • The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 23.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
    • Although AMZN's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average.
    • 36.46% is the gross profit margin for AMAZON.COM INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.65% trails the industry average.
    • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 1700.0% when compared to the same quarter one year ago, falling from -.00 million to -6.00 million.
    • Net operating cash flow has declined marginally to 2.00 million or 2.04% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, AMAZON.COM INC has marginally lower results.
    • You can view the full analysis from the report here: AMZN Ratings Report

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    The Truth About Amazon Drop Shipping

    31-07-2018 · The main goal of this article is to help show you why drop shipping on Amazon might not be the best way for you to build a real brand that provides real value to your customers and your bank account. Let’s first start by taking a look at the three different ways you can make money– from literally anywhere in the world– using the drop shipping business model.

    31-07-2018

    When it comes to dropshipping on Amazon, it comes down to this:

    Should you spend your precious time selling on Amazon, making good money for an unpredictable amount of time? Or...

    Spend it building an eCommerce business that will last and continue to bring you money years into the future?

    Which sounds better?

    In this article, I'm going to cover why dropshipping on Amazon might not be the best way for you to build your eCommerce business on.

    long term business success quote

    There are a lot of different ways to drop ship, but the one I get asked about the most is Amazon dropshipping. To help answer whether you should use Amazon to drop ship, let’s take a look at some of the pros and cons of selling on Amazon.

    First up, are the pros to Amazon

    A lot of people are very concerned with traffic, and how to get it to their store. After all, traffic is the cornerstone of any eCommerce business.

    One of the best parts of Amazon is that it has around 2.5 billion visitors each month that are looking to buy.

    Now this doesn’t mean that all that traffic is going to come across your door step… But it does mean there is already a pool of people ready to purchase, which is hard to pass up.

    The good news is Google PLAs have even more reach, so if you do what I teach and build your own dropshipping store, you’re going to have a rich pool of people to market to.

    Remember, with Google PLAs you’re only targeting those who are likely to buy. Rather than hoping that the right people show up to your drop ship Amazon store.

    A lot of barriers to starting your own dropshipping business are technical ones. People think they have to be web developer to have a beautiful storefront.

    With Amazon, you aren’t registering URLS, working with a hosting company, and doing a bunch of back-end work on your site.

    Instead, you just use their process and list products on their site. It is a lot less daunting to people who believe the myth that you have to know a lot about technology to create something that sells, something professional looking.

    Selling on Amazon Pros:

    • Very Large Audience
    • Easy Set-Up

    With that being said, let’s take a look at the cons of selling on Amazon…

    Con: Not A Sellable Asset

    One of the most exciting things about building your own store is that you’re building a sellable asset. It’s something that people new to eCommerce overlook. After you find some success, your store has a real value if you ever want to sell it. That’s because buyers are interested in finding dropshipping stores that are already successful.

    With Amazon, you don’t have a sellable asset. It’s almost a flea market type structure, where you pay for a booth. You don’t own the flea market, you’re just a vendor in it.

    Con: No Access To Customer Data

    If you’re new to eCommerce you may not know that having customer data is crucial to growing your business.

    With data and emails you can build a meaningful relationship with your audience, which you’ll use to sell new products. It’s called the Lifetime Value (LTV) of a customer.

    With Amazon dropshipping, you aren’t privy to the customer data… leaving you with no way to scale your business.

    Con: Your Store Could Disappear Overnight

    Now Amazon can use that customer data that I previously mentioned to discover what new niches are profitable and then expand their very own line into your niche.

    This happens more often than you would think and pretty much shuts down your store overnight. Since Amazon owns every part of the transaction, they can offer a better price than you’ll be able too.

    Not to mention they will have their product rank above yours because it’s their site after all.

    Con: Suppliers Won’t Work With You (Especially Local) if you're an Amazon Dropshipping

    With the flea market nature of selling on Amazon, a lot of suppliers won’t want to associate their brand with you. Instead, if they want an Amazon presence, they will just set up their own store. Basically there is very little upside to work with you.

    Selling on Amazon Cons:

    • Not a Sellable Asset
    • No Access to Customer Data
    • Your Store Could Disappear Overnight
    • Suppliers Won’t Work With You

    Now that you have some pros and cons, I want to talk about how you get products to sell on Amazon.

    How to Drop Ship Products

    The main goal of this article is to help show you why drop shipping on Amazon might not be the best way for you to build a real brand that provides real value to your customers and your bank account.

    Let’s first start by taking a look at the three different ways you can make money– from literally anywhere in the world– using the drop shipping business model.

    Arbitrage

    Arbitrage is the first way to drop ship, and it’s the most common way to drop ship on Amazon. Basically, this model consists of buying from one place to sell to another.

    So in this example, especially selling on Amazon, a lot of people try to source products from a company like Walmart. These drop shippers try to find products with low prices that sell for more on Amazon! In this scenario, Walmart would be the supplier.

    AliExpress Dropshipping

    Another method of drop shipping is using AliExpress– a Chinese marketplace.

    With this drop shipping method, you are sourcing products from Chinese factories to ship to customers all over the world. Drop shipping from China may sound like a good idea, considering many factories are located in that country.

    However, what is tricky about this method is that most people use Oberlo, which is pretty much a middleman app. And as you may know, using a middleman is a huge mistake I see new drop shippers making.

    Domestic Dropship Suppliers

    The third drop shipping method I want to discuss is selling for suppliers in your home country. With this method you are building a drop shipping business, and selling for suppliers in your home country.

    For example, I am from the States, my businesses are in the States, and I am selling for suppliers that are located in the States.

    If you are drop shipping from Australia, you would look to drop ship for Australian suppliers. That’s how domestic drop shipping works.

    So, in case you were wondering, no you don’t need to use Amazon with the above drop shipping methods.

    Since there are a lot of different drop shipping strategies, here’s a quick example of the shopping experience.

    Let’s say our customer’s name is Sarah. She’s on the internet, sees your ad, and lands on your Shopify store.

    amazon dropshipping

    Once she places her order, you have a few different options for fulfillment:

    1. Arbitrage Model: You could go to Amazon, buy the product, and have it shipped to Sarah.
    2. Use a Middleman: You could also have Oberlo linked to your store, which would be fulfilled from a third party supplier (most likely AliExpress).
    3. Domestic Suppliers: The last option is working with a domestic supplier, which means they are based in the country you’re doing business in.

    Again, these are the main ways that most people actually run drop shipping businesses to use as a fulfillment method.

    Amazon Dropshipping Using the Arbitrage Model

    Let’s tackle the arbitrage model using the same scenario from above. Now, here is the thing - can this work? The answer is, yes.

    However, one of the biggest problems here is that you have to make sure these products are always in stock.

    When your orders are coming in on Amazon and you have to fulfill them, you are not working with the supplier who is telling you how much inventory they have.

    You are going to another website, buying these items, and then shipping it to the customer that bought from you on Amazon. Not to mention, the packaging is going to come from Wal-Mart, and that starts to lead to serious customer service issues.

    Even though I know people are using this method and making some quick money doing so, I have two reasons why I would never recommend this model.

    amazon dropshipping with the arbitrage model

    Arbitrage requires quite a bit of manual work. When you order the products from Amazon, you have to private message the sellers and ask them to not include any slips, invoices, and packaging from Amazon.

    Otherwise, your customer will receive something from Amazon, becoming confused and angry. This isn’t a good business relationship, which leads to problem #2…

    It’s not a business.

    Problem #2 It’s Not a Business

    Plain and simple, with this model of drop shipping on Amazon you are not building a sustainable business. You are building a quick project, trying to flip a product to make a couple of bucks.

    Maybe you can get if you score a large enough gap between the Wal-Mart price and the Amazon price...maybe.

    The arbitrage model could be a hobby or something to experiment with for a short time, but stay wary.

    Issues with Dropshipping from Amazon:

    • Not sustainable (not consistent selling products)
    • Too much manual work for small profits (lots of private messaging to customers)
    • No barriers to entry means lots of competition
    • Customers will occasionally receive Amazon packaging on accident (leading to frustrated and angry complaints)

    Dropshipping with AliExpress

    If you are still set on drop shipping with Amazon, your next option would be using a website that gives you a bit more freedom– like AliExpress. AliExpress allows for more freedom by offering private label products.

    For example, instead of selling branded Sharpie markers, with AliExpress, you could sell a ‘private label’ product, such as Anton’s Famous Orange Marker. This leaves you with a little bit more control.

    TIP

    A private label product is manufactured by a contract or third-party manufacturer and sold under a retailer's brand name.

    Yet, using AliExpress to drop ship isn’t without its flaws. If you want use AliExpress to drop ship on Amazon, you are going to run into the issue of long lead times.

    Even the fastest ePackage shippers on AliExpress– we’ve tested all of them just to see– take weeks to deliver the item to your customer!

    If you are familiar with Amazon, you know about their impressive shipping speeds. Most of the world is used to Amazon delivering packages in two or three days, not two to three weeks.

    And guess what? On top of that, you are almost guaranteed to get negative reviews, and returns will be a bigger headache than your customers even imagined.

    If your customer returns the product, it’s not going back to China. Thanks to Amazon’s very lenient return policy, all of these products are returned back to YOU. Because of this, I do not recommend this model if you want to drop ship on Amazon.

    How to Make Money on AliExpress

    The way AliExpress drop shippers usually make money is by selling on their own Shopify stores. On Shopify, you can get away with a less-than-perfect customer service experience. Bad reviews won’t break the bank.

    On the other hand, if your customers on Amazon aren’t happy, they tell the world, and you could get banned from the site.

    If you are drop shipping with your own store, maybe you can get away with not having the best customer service. That’s the category a lot of these AliExpress drop shippers fit into.

    Issues with Drop Shipping from AliExpress:

    • Always trying to catch the latest trend
    • Inexpensive & sub-par quality products
    • No MAP policies
    • No branding whatsoever
    • Long lead times
    • No barriers to entry

    How to Use Amazon to Drop Ship Domestically

    The third method of drop shipping on Amazon is how you can actually build a real business.

    The best example I can give you would be if I sold a simple paddleboard in my drop shipping business. If I had a good business relationship with the paddleboard suppliers, I could ask, “What's my cost, what's my wholesale cost, what's my MAP cost, and what's the MSRP?”

    Then I sell the paddleboard and the company fulfills the order. We’re all familiar with this process!

    This model is one that works well to drop ship on Amazon.

    Now, I am not saying it just because it's what we do. We use this model because it's what works.

    Think of it this way: basically you are selling these products that are on Amazon, and your supplier is in your home country. When an order is placed, you tell your supplier to ship them out. A few days later, your Amazon customer gets their product.

    After that, they are either happy with your product or they are not. Either way, if it gets returned, the product goes right back to your supplier. Now you can start to see the benefits with a model like that.

    However this method is not perfect and has issues of its own...

    Issues with Domestic Dropshipping on Amazon:

    • You need to do market research
    • You need to build a website BEFORE you apply
    • You need to earn the trust of top-tier suppliers
    • It takes real work to get started
    the 3 different ways to do Amazon dropshipping

    I have been in the eCommerce industry for more than a decade, and I have learned a lot of things along the way. One of the biggest being that about 70-80% drop shipping suppliers and brands will forbid you from selling their products on Amazon.

    This is all part of what makes a good drop shipping supplier, well... a good supplier.

    The reason many drop ship suppliers don’t want you to sell on Amazon is because there isn’t much of a benefit to sell there. The last thing these suppliers want is 20 different companies like us having a price war on Amazon or eBay.

    amazon dropshipping issue

    So if you’re reading this, you are probably thinking, “Thanks Anton, I just read a huge blog post only to find out I can’t dropship on Amazon??”

    Well, that’s pretty much true. However, you can get suppliers who don’t mind if you sell on Amazon. And if they don’t mind, it may be well worth your efforts to give drop shipping on Amazon a shot.

    If You’re Still Set on Amazon Dropshipping, Consider This...

    If your suppliers tell you NOT to sell their products on Amazon, here is what I recommend you do: Get approved with the individual suppliers in your niche. Then sell their products as their brands making you the retailer.

    Think about it: when you go to a Walmart or a Target, they don't sell their own products, they sell products for different brands.

    In your case, you would have five different brands. Then you build a Shopify store with all of their products listed on your website. THEN, you drive traffic to your website through Google. Check out a few of our example stores in our Ultimate Dropshipping Guide.

    The idea of selling on Amazon is attractive because there are so many people shopping there every day.

    But get this... Google Shopping and Google Product Listing Ads have even more people searching around for products to buy!

    So...Should you be Selling on Amazon?

    I hope you found this explanation helpful. If you were excited about drop shipping on Amazon and I just burst your bubble, I’m sorry. But this is the truth– whether you like it or not.

    I am telling you this from my experience in the business. This is how we have consistently been able to drop ship profitably. It's not drop shipping on Amazon. It's not drop shipping on eBay. It's not drop shipping from China. It's not doing the arbitrage model.

    It's working with legitimate brands, developing real business relationships, building a real business, and using Google as the primary driver of sales.

    If you got something out of this post, please leave a comment below. If you have any questions, throw them in the comments! I'm more than happy to get down there and help you out.

    Dropshipping in 2021: What is ... - Sell on Amazon

    For Amazon sellers, using a dropshipping service is generally allowed by Amazon dropshipping policy, as long as you’re the seller of record and identify yourself as such. Manufacturers. Manufacturers make products to sell to wholesalers and retailers. You can purchase goods from manufacturers, but the bulk purchase amounts they may require can potentially be a barrier to starting or scaling ...

    Dropshipping is an order fulfillment option that allows ecommerce businesses to outsource procuring, storing, and shipping products to a third party. This order fulfillment method appeals to entrepreneurs seeking low overhead and low capital investments, but it can come at a cost.Ecommerce is competitive. Dropshipping may appeal to entrepreneurs looking to sell generic products, but it can limit opportunities to build a brand or differentiate products. Thus, businesses that use dropshipping may wind up competing on price, leading to low margins.

    If you are considering dropshipping for your ecommerce business, there are several factors you should review—including some variations and alternatives that offer similar benefits.

    Dropshipping allows you, the seller, to outsource the fulfillment process to a third party, typically a supplier. The manufacturer or third-party supplier handles the production, storage, shipping, and delivery of products to the customer.

    This business model appeals to some ecommerce sellers because it can decrease overhead and operating costs. In some dropshipping agreements, you handle marketing and customer service, while the dropshipping service manages the physical goods and fulfillment.

    a man and a woman looking at a clipboard while standing in a warehouse

    When you work with a dropshipping supplier, you pay them to fulfill products when a customer places an order. The exact logistics of dropshipping depend on your arrangement, but typically the dropshipping process follows this general sequence:

    1. Your dropshipping supplier sources or produces the product.
    2. You make an agreement with the dropshipping supplier.
    3. Your dropshipping supplier stores the inventory.
    4. You host the ecommerce storefront or webstore.
    5. A customer places an order.
    6. You process the payment.
    7. You forward the order to the dropshipping service.
    8. The dropshipping service prepares the order.
    9. The dropshipping service ships the product(s).

    Usually, you send customer orders to the dropshipper, then you inform customers the products are on the way, and the rest of the physical fulfillment process is out of your hands.

    Let’s unpack some of the key players and their roles in detail, starting with the seller of record—in other words, your ecommerce business.

    The dropshipping process starts with you. As the seller of record (SoR), you’re the individual identified as selling the product to the end consumer. You set the price, record the purchase as revenue, and assume responsibility for the sales tax on a particular sale. Even when a third party stocks and ships the items, you’re the seller of record because you own the products before they ship to the customer.

    For Amazon sellers, using a dropshipping service is generally allowed by Amazon dropshipping policy, as long as you’re the seller of record and identify yourself as such.

    Manufacturers make products to sell to wholesalers and retailers. You can purchase goods from manufacturers, but the bulk purchase amounts they may require can potentially be a barrier to starting or scaling your business. Some manufacturers may offer dropshipping services.

    In a typical product supply chain, wholesalers buy from manufacturers and sell to retailers at a slight markup. They function as middlemen; generally, they do not sell to the end consumers but may provide dropshipping services to retailers.

    Determine which dropshipping providers could be right for you based on your business model and fulfillment requirements, among other factors.

    In ecommerce, as in life, there are advantages and disadvantages to any fulfillment approach. Whether the gains are worth the pain largely depends on your goals and business situation. Here are potential pros and cons to consider when weighing whether dropshipping is right for your ecommerce business.

    Possible benefits of dropshipping include:

    • Overhead costs: Since you don’t store or ship the products, dropshipping has the potential to lower overhead costs, such as maintaining a storage facility or sending products to customers.
    • Starting costs: Entrepreneurs looking to start a business with minimal investment may turn to dropshipping as they don’t need to invest in facilities or resources to process orders.
    • Multi-channel selling: You can use dropshipping for your business while selling on your own domain, through a store like Amazon, or social media channels —or all of the above.
    • Operating location: Dropshipping allows you to fulfill orders regardless of your operating location, opening up a possibility to work from anywhere.
    • Scalability: Leveraging suppliers can make it feasible to accept more orders without increasing the inventory you store, package, and ship.

    Potential limitations for dropshipping include:

    • Competition: Given the low cost and investment to get started, dropshipping is a highly competitive field.
    • Product quality: Dropshipping reduces your involvement in the order fulfillment process, curtailing your ability to monitor and guarantee product quality.
    • Branding: Because the products you sell may not be unique or distinguishable from similar offerings by other sellers, you could have trouble differentiating your offering.
    • Profit margins: Little to no product differentiators means your business may end up competing more aggressively on price. Selling at low prices can eat up your profit margin.
    • Fulfillment timeline: When a dropshipping service handles the fulfillment process, you do not have control over order selection, packaging, and shipment.
    • Inventory management: Up-to-the-minute updates on what is available in stock may not be possible. If a customer places an order only to find the product is out of stock, this poor experience can discourage future orders and damage your brand.
    • Range of offers: Because you don’t handle order fulfillment, you may be limited in the special offers and promotions you can run, such as bundling or free shipping.

    For some businesses, dropshipping limitations do not outweigh the potential benefits. Luckily, if you want to lower your inventory and order fulfillment costs, a service like Fulfillment by Amazon may be an option. For some sellers, FBA provides a happy medium, offering many of the benefits of dropshipping without the downsides.

    Fulfillment by Amazon (FBA) offers similar benefits to dropshipping while giving you more control over your brand experience. You don’t need to sell products in Amazon stores to use FBA—although with an audience of hundreds of millions of unique visitors each month, Amazon is a selling channel worth considering.

    With FBA, you store products in an Amazon fulfillment center, and we:

    • Offer quick delivery with Prime Shipping
    • Manage customer service
    • Take care of returns
    • Notify you when you need to restock products

    • You decide the products and quantities you’d like to fulfill and send them our way.
    • We receive products into our network and store them in Amazon fulfillment centers.
    • As orders arrive, we pick, pack, and ship the products on your behalf.
    • Amazon manages customer service and returns on these orders.

    It depends on your business. Here are a few questions to ask yourself if you’re considering dropshipping.

    Your brand is the look and feel of customer-facing aspects of your business. Building a memorable brand impression can help grow customer loyalty.While you may be able to create a branded online experience, dropshipping gives you less control over product quality, delivery experience, and the aesthetics of the final package. If the products and packaging fall short of expectations, a customer may choose not to purchase from your brand again.

    Dropshipping suppliers often offer little room for product customization. This limitation may make it difficult to set your brand apart from the competition.

    Product quality can have a big impact on other aspects of your business such as customer acquisition, brand loyalty, and returns. While you may be able to inspect the quality of products at the start of your dropshipping relationship, you will likely have limited control over the quality of the items you sell on an ongoing basis.

    If the products fail to meet customer expectations, your business could receive negative customer reviews.

    illustration of man looking at customer reviews on mobile device
    Ecommerce customers tend to expect quick shipping. In a recent survey, nearly 84% of people surveyed regarded delivery as an essential part of their online shopping experience. Long shipping times can negatively impact your business. When working with a dropshipping supplier, review its standard shipping costs and delivery timeframes.

    For sellers looking for fast order fulfillment services, a service like FBA can be valuable.

    During the 2019 U.S. holiday season, independent third-party sellers—mostly small and medium-sized businesses—sold and shipped over 100 million items with Prime Free One-Day Delivery.

    In some cases, the dropshipping business model allows you to hold off on product procurement until customers actually place orders. This can make dropshipping attractive to entrepreneurs who want to get a business up and running with limited inventory investment. Some alternatives like third-party fulfillment also allow you to launch and run your business with less capital compared to sourcing, storing, and shipping products on your own.

    Compared to other business models, such as owning a retail store or building your own order fulfillment center, dropshipping has a lower barrier to entry. Unfortunately, this can mean more competition for your business. The playing field can be highly competitive for businesses that use dropshipping. Dropshipping sellers are commonly able to offer products at low prices because they’ve invested so little. If you use dropshipping for your business, you may earn low profit margins.

    You might be able to overcome some of these issues if you position your business within a niche outside of any hyper-competitive field. Find potentially profitable or less competitive niches through market research, networking, and sales. Or invest in differentiating your brand.

    If you choose to use dropshipping, you may have little to no control over the supply chain. Delays in production might determine how many orders your dropshipper is able to fulfill. Having to disappoint your customers by informing them an item is out-of-stock is hopefully the exception and not the rule. Sourcing products through multiple dropshipping services is one way to avoid running low on product inventory. When one supplier is out of a needed product, you can rely on another. However, working with multiple suppliers adds complexity to logistics and fulfillment, which may defeat the purpose of a dropshipping strategy.

    Returns are an inevitable part of ecommerce business. Sometimes the return process can be as simple as a customer contacting you regarding an item they would like to return. The customer sends back the product, then you refund the customer and contact the dropshipping supplier to credit or reimburse you. But this is not always the case. Be prepared for more complex return and replacement processes. Take the time to understand how a dropshipping service handles returns before creating your refund and return policy.

    Think through the steps of the ecommerce transaction. Here are some examples of questions to ask before signing on with a dropshipping supplier:

    • Who is responsible for defects?
    • Who covers return shipping fees for defective items?
    • What are the supplier’s restocking fees?
    • What is the return window for customers?

    Questions like these can help you understand a dropshipping agreement and help paint a clearer picture of the potential costs involved before you make changes to your business model.

    illustration of seller answering customer questions via online chat
    Even though you may not physically handle the products, you may still need to respond to customer questions and concerns about a shipment, delivery, or product quality.

    A seemingly small miscommunication with your dropshipping supplier can result in negative reviews and poor customer experience. To avoid this, consider the entire purchasing process from the customer’s vantage point. Pay special attention to the following aspects of the customer experience:

    • After ordering, do customers get a shipping notification on when to expect their orders?
    • Do packages arrive in the expected time frame?
    • Do products arrive in proper condition?
    • Is the packaging a good reflection of your brand?

    Optimize each of these touchpoints to create a positive customer experience, which can help you earn positive reviews and build brand loyalty.

    illustration of a fulfillment center, a support representative, and a package with return label

    If dropshipping is not right for your ecommerce business, there are alternatives. Here are a few options if your goal is to outsource fulfillment.

    As an alternative to dropshipping, some sellers purchase products in bulk, then enlist the help of a third-party fulfillment service to store items, pick and pack orders, and handle the shipping to customers.

    This approach allows you to procure products upfront, potentially at lower costs. You can also:

    • Assess the quality of items before they ship to the fulfillment center
    • Offer promotions and special offers on products
    • Offer product bundling or subscription services through some providers
    If you would like to outsource fulfillment while maintaining control over product quality, learn about FBA.

    At some point in the life of your business, you may require specialty products featuring your own branding. Selling branded products can help your business grow by helping you:

    • Differentiate your business from other ecommerce brands
    • Earn customer loyalty by building a unique online experience
    • Building a memorable ecommerce brand identity
    • Building brand recognition to help you launch future products
    • Build an asset, your brand identity
    Some sellers find a dropshipping supplier to add individualized touches like special packaging and branding and create branded products or white label products.

    Another option is to have a manufacturer produce branded products in bulk, then use FBA for distribution. This method lets you take advantage of Amazon’s fast Prime Shipping, helping you stand out in the crowded ecommerce market.

    Affiliate marketing is a different business model altogether, but it’s worth considering if you’d prefer to avoid managing customers, orders, and returns entirely.Affiliate marketers don’t sell any products at all. Instead, they promote products for an ecommerce retailer and collect a commission when a customer purchases through a unique referral link.

    While affiliate marketing is an advertising business model as opposed to a retail solution, it can provide benefits such as minimizing startup or overhead costs while allowing you to build an audience and earn money when products you promote to your audience result in sales.

    With affiliate marketing, you market a product online and include a link for customers to buy the item. The link takes customers to a website where they can place an order directly. You get paid when the customer uses your referral link and makes a purchase. The supplier handles the order confirmation, fulfillment, and shipping.

    Affiliate marketing can be a way to jumpstart your ecommerce business or monetize an existing asset such as a blog or email list. Since you don’t stock, process, or ship the products, you may be able to operate with relatively low overhead costs. You can also:

    • Start an affiliate marketing business using your own website or social media accounts
    • Outsource customer management to your supplier, which then acts as the seller of record and handles customer communication
    • Outsource returns or order management to your supplier

    Unlike dropshipping, if you use affiliate marketing, your supplier handles returns for products. Thus, there may be a set window in which the supplier holds your commission payment, after which you get paid.

    You can earn a commission on orders customers make from referral links on your website, email, or social media channels.

    Learn about Amazon Associates
    At the end of the day, only you can decide whether dropshipping is right for your business or not.

    While it may be appealing not to handle physical products, pay for warehouse space, ship orders, or manage stock levels, there are drawbacks as well. Weigh your options and goals in order to find the right online selling and fulfillment strategy to help you grow your ecommerce business.

    Here's Why Amazon.com (AMZN) Stock Is Down Today

    NEW YORK (TheStreet) -- Amazon.com(AMZN) - Get Amazon.com, Inc. Reportstock is declining 2.40% to 0.51 in mid-afternoon trading on Thursday, as …

    NEW YORK (TheStreet) -- Amazon.com (AMZN) - Get Amazon.com, Inc. Report stock is declining 2.40% to 0.51 in mid-afternoon trading on Thursday, as Alphabet's (GOOGL) Google Cloud Platform won Apple (AAPL) as a customer in a blow to Amazon.com's Amazon Web Services, sources told CRN.

    Apple reportedly signed the deal with Google late last year, and has since greatly reduced its reliance on Amazon.com's cloud computing services while remaining a customer. 

    The iPhone-maker is spending between 0 million and 0 million on Google Cloud Platform, CRN notes. This would greatly benefit the vendor, which is widely believed to be third behind Amazon Web Services and Microsoft (MSFT) Azure in the public cloud.

    However, Pacific Crest contends that the cloud services market provides a billion opportunity big enough for Amazon.com, Microsoft and Google, Barron's reports.

    "There would certainly be some wins and losses among the three along the way, but it would likely be good for all three in the intermediate term," the firm wrote in a note. 

    (Amazon.com is held in the Growth Seeker portfolio. See all holdings with a free trial.)

    Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.

    Amazon.com's strengths such as its impressive record of earnings per share growth, compelling growth in net income and robust revenue growth are countered by the fact that the company has favored debt over equity in the management of its balance sheet.

    You can view the full analysis from the report here: AMZN

    TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.

    Image placeholder title
    Amazon Q2 revenue falls short of estimates, Q3 forecasts ...

    Tech juggernaut Amazon ( AMZN) reported its Q2 2021 earning s after the closing bell on Thursday, missing expectations on revenue and falling short …

    • U.S. markets will close on Friday Dec. 24 or Christmas Eve because the holiday falls on a Saturday, but equity markets will be open on Dec. 31.

    • Every year around this time, two powerful forces conspire to artificially suppress stock prices — and create bargains: Lust and vanity. As for the first force — the lust for profits — this is when individual investors dump losers to create tax losses to offset gains. The second force — vanity — has fund managers putting “window dressing” on their portfolios to get out of losers so they don’t have to show them in annual reports, points out Bruce Kaser, editor of the Cabot Turnaround Letter.

    • After discovering FORTY 1,000% winners, he just announced his favorite stock of the year. Get the name and ticker.

    • MarketWatch Picks has highlighted these products and services because we think readers will find them useful; the MarketWatch News staff is not involved in creating this content. It’s hard to escape the hype surrounding cryptocurrency, from Elon Musk saying that “there’s a good chance that crypto is the future currency of Earth” to headlines like this one, predicting that Bitcoin could hit 0,000 by 2023. Whether either of those things happens, or crypto takes a turn for the worse, remains to be seen, but one thing is clear: There’s a lot of action happening around cryptocurrency: Cryptocurrency payment gateway Triple A estimates that as of this year, there are more than 300 million crypto users worldwide and over 18,000 businesses that accept crypto payments.

    • The final month of 2021 has been brutal for growth stocks, with some names down double-digit percentages again. As of this writing, Nvidia (NASDAQ: NVDA), Fortinet (NASDAQ: FTNT), and Upstart (NASDAQ: UPST) are up a respective 125%, 132%, and 258% year to date, making them by far my best stocks of 2021 and helping prop up my portfolio overall. Here's why I think Nvidia, Fortinet, and Upstart are still buys to kick off 2022 if you plan to stick with them over the next decade.

    • Money managers and investors have been drawn to the relatively low valuation of the Chinese e-commerce giant. But the company is still plagued by some chronic problems, some of which began well before the pandemic and regulatory crackdowns.

    • A massive and surprising new transition could soon impact the wealth of thousands, while leaving everyone else worse off than before.

    • Yahoo Finance's Ines Ferre details several of the trending stocks, including JD.com's drop due to Tencent selling off a portion of its stakes, Crocs acquiring footwear brand Heydude, and the first signs of Nikola delivering on their electric truck productions.

    • Investor's Business Daily

      The Santa Claus rally came early this year. Tesla surged, while AMD led stocks flashing buy signals. Here's what to do now.

    • The billionaire founder of the world's largest hedge fund says "cash is trash."

    • New Jersey drivers in these zip codes are surprised to find out they have been overpaying on their auto insurance bill.

    • See: I’m a 35-year-old father of four with 5,000 saved for retirement. Retirement can be an emotional time, usually for individuals leaving the workforce who have felt their careers defined much of who they are, but sometimes also for the retiring person’s family. Your wife may have a lot of feelings associated with your retirement, and it’s important to keep her in the loop every step of the way, as you seem to have done so far.

    • The stock market got another positive bump on Thursday, with investors getting into the holiday mood a little bit early. The S&P 500 (SNPINDEX: ^GSPC) closed just shy of a record high, climbing 29 points to 4,726, while the Nasdaq Composite (NASDAQINDEX: ^IXIC) picked up 131 points to 15,653. Electric-vehicle company Nikola (NASDAQ: NKLA) hit the gas in a big way on Thursday, but popular footwear-manufacturer Crocs (NASDAQ: CROX) took a pretty big hit.

    • AMD had agreed to buy

      .6 billion worth of chips between 2022 and 2024, according to a filing with the U.S. Securities and Exchange Commission in May. Wafers are the large discs of silicon on which computer chips are made. GlobalFoundries was created when AMD spun off its chip factory operations in 2009 and has supplied AMD since then. Since then, AMD has turned to Taiwan Semiconductor Manufacturing Co to supply the most critical sections of its computer processors called "chiplets."

    • If you've got more than

      ,000 in your checking account, you need to make these moves as fast as possible.

    • After opening Thursday on a soft note, electric vehicle stock Nio (NYSE: NIO) swiftly reversed course and jumped 2.7% by 12:25 p.m. ET after an analyst picked Nio as an attractive stock to buy as we enter the new year. Deutsche Bank analyst Edison Yu added Nio to the bank's fresh money list as it sees the stock's current price a "great entry point" for 2022, given the recent price drop in Nio's shares. Specifically, Yu believes some of the biggest headwinds for Nio that have impacted investor sentiment can be reversed in the coming year.

    • Investor's Business Daily

      Take a look at this list of stock market holidays in 2021 to find out whether the market will be open on days like Columbus Day, Black Friday, Christmas Eve and more.

    • The past 20 months have been good for growth stocks, to say the least. In that time, the S&P 500 just about doubled, while the NASDAQ has done even better, gaining 125%. Corporate earnings strongly rebounded this year, post-COVID, and the government’s stimulus payments have helped put consumers and investors flush with cash. Most of the factors that have support the markets are still in play. Corporate earnings and consumer cash holdings remain high, interest rates are at rock bottom, and stocks

    • This Holiday, bring your phone to Verizon and get 0 on us. With select Unlimited plans. Add'l terms apply.

    • AT&T Inc. ( NYSE:T ) will pay a dividend of US

      .52 on the 1st of February. This means the annual payment is 8.4% of...

    • Investor's Business Daily

      Investors piled a record 0 billion into ETFs this year — nearly double what they invested in all of 2020. What are they so eager to buy?

    • What happened Shares of Novavax (NASDAQ: NVAX) were tumbling 5.3% lower as of 11:17 a.m. ET on Thursday. The company reported positive results on Wednesday afternoon from studies evaluating its COVID-19 vaccine against the omicron variant.

    • Track your activities throughout the day, It records your steps, distance, calories, sleep status, heart rate, blood pressure and blood oxygen Level.

    • Shares of fuel cell leader Plug Power (NASDAQ: PLUG) inched higher Thursday afternoon, rising 2.2% through 2:22 p.m. ET on what was actually a pretty slow news day for fuel cell companies. In fact, scanning the news feeds, it seems the only real news is that Plug rival FuelCell Energy (NASDAQ: FCEL) confirmed yesterday that as soon as the Christmas holidays are past -- before market open on Dec. 29 -- it will be reporting its fiscal fourth-quarter 2021 earnings. According to analyst estimates, Q4 is going to be a pretty good one for FuelCell Energy.

    • The Food and Drug Administration’s authorization of Pfizer (ticker: PFE) Covid-19 pill Paxlovid on Wednesday offered some hope. The authorization represents an extraordinary coup for Pfizer, its second of the pandemic. Analysts expect Pfizer to sell .7 billion worth of the drug in 2022, according to FactSet, though the company now says that it will make 120 million courses of the drug next year, 40 million more than previously forecast, which will probably drive those estimates higher.

    • According to eMarketer, consumers will spend .9 trillion shopping online this year, and that figure is expected to grow at an annualized rate of 10.7% to reach .4 trillion by 2025. With that in mind, MercadoLibre (NASDAQ: MELI) and Shopify (NYSE: SHOP) have become key players in the e-commerce industry. MercadoLibre is the largest e-commerce and fintech platform in Latin America.

    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.

    AMZN: Why Amazon Stock Is Due For a Breakout Now ...

    23-02-2021 · Blowout Earnings. The question is why. Truthfully, it’s hard to tell. There are some possibilities. Amazon stock did dramatically outperform the market in …

    23-02-2021

    Here’s an interesting hypothetical about Amazon (NASDAQ:AMZN). Imagine that on July 20, an investor knew everything that was going to happen in the market for the next seven months — except for the price of Amazon stock.

    Amazon stock
    Source: Ioan Panaite / Shutterstock.com

    She knew that the tech-heavy Nasdaq Composite would rally 29%, and the large-cap-focused NASDAQ 100 would rise by 24%. She knew that e-commerce would stay hot, as Shopify (NYSE:SHOP) gained 42% and Wayfair (NYSE:W) 27%. And that the market’s multi-year preference for growth over valuation would remain firmly intact.

    She knew that Amazon’s fourth quarter earnings would be an absolute blowout, following a strong Q3. That post-pandemic trends in Amazon’s business beyond e-commerce, like cloud and streaming video, would stay favorable. She even knew that Chief Executive Officer Jeff Bezos would step down.

    With all that information, would that investor guess that Amazon stock, over those seven months, would gain less than 2%? I don’t believe she would. And that seems to be the opportunity.

    An Impressive Growth Story

    For years now, Amazon has looked like one of the most expensive stocks in the market. Until recently, it was usually the most expensive large-cap name out there, or at least close.

    • 10 Dividend Stocks Increasing Their Payouts 

    Part of that appearance came from the fact that Amazon stock always had a high price-earnings multiple. But the focus on that metric alone missed a few key points, as I’ve long argued. Notably, Amazon’s earnings were depressed by constant investments in the business. More broadly, Amazon hasn’t fully maximized price realization, instead preferring to acquire customers (both in the U.S. and overseas).

    Those specifics aside, there was no reason for Amazon to be cheap. This literally is one of the best growth stories in history. This is a massive company that like clockwork has grown revenue at a 20%-plus annual clip. It’s arguably the best retailer in the world – although Walmart (NYSE:WMT) fans might disagree. Its cloud business still has a massive market share lead, against the likes of Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), neither of which is accustomed to second place.

    This simply wasn’t a stock that investors could look to purchase on the cheap. Amazon never gave the reason a market to offer much of a discount.

    Amazon Stock Isn’t Quite Cheap, But …

    Certainly, Amazon stock isn’t yet trading at a discount. But after seven months of sideways trading, along with impressive earnings growth, valuation suddenly looks rather reasonable.

    Relative to full-year 2020 results, AMZN now trades at about 52x free cash flow, if still about 78x earnings. But, at least based on Wall Street estimates, those multiples should come down in a hurry. EPS estimates for 2022 sit above , putting the forward price-earnings multiple below 50x.

    None of those metrics make AMZN a value play. But in this market, 49x forward earnings is not terribly out of line.

    Meanwhile, that 2022 estimate (admittedly with an enormously wide range) suggests a 25% annualized growth rate over the next two years. There are companies growing closer to 10% trading in the low 30s on a P/E basis. I’d much rather pay up for this kind of growth.

    Again, Amazon stock isn’t cheap. But it shouldn’t be, and it’s at least cheaper than it’s been in quite some time.

    Blowout Earnings

    The question is why. Truthfully, it’s hard to tell.

    There are some possibilities. Amazon stock did dramatically outperform the market in the first half of the year with a 49% rally, as investors priced in tailwinds from the pandemic. That rally may have some still-lingering effects.

    Competition is a concern. In cloud, Microsoft’s Azure continues to post impressive growth, and there are no shortage of other providers trying to take share. On the e-commerce side, smaller niche players have done impressively well particularly since the pandemic hit, which might raise some questions about how Amazon’s broad approach will be going forward.

    Those concerns have some validity. But I’d argue that they’re at least overblown. Amazon’s fourth-quarter earnings report this month shows why.

    Amazon’s revenue grew 44% year-over-year in the quarter. It rose 38% for the year.

    Bear in mind that the full-year growth came off a 2019 base of 0.5 billion. Amazon added more than 0 billion in sales in a year.

    There are 32 U.S. companies that generated that much total revenue in 2020. There are only five retailers to hit that level, if you include only the pharmacy operations for CVS Health (NYSE:CVS).

    Amazon isn’t giving that revenue away, either. Operating margins were nearly 6% of revenue in 2020. The idea that the company isn’t profitable at this point is a fiction.

    The numbers, across the board, are simply astounding. Yet, for the last seven months, investors have ignored Amazon stock. I don’t believe they’ll do so for too much longer.

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

    3 Reasons Why Stocks Have Been Falling

    25-01-2022 · It’s been a historically bad start to the year for markets.

    25-01-2022

    Stocks are having a bear of a time. Photo: Justin Lane/EPA-EFE/Shutterstock

    The first 21 months of the COVID-19 pandemic were tough for human beings. But they were spectacular for stock markets. The S&P 500 ended 2020 worth 16 percent more than it had been at the year’s onset. In 2021, the index climbed another 27 percent.

    Alas, this January has sent a chill down equity traders’ backs.

    America’s major stock indexes have declined for three straight weeks. And on Monday morning, shares fell further still, with the S&P 500 shedding another 2.4 percent in value, bringing the benchmark index down to “correction” levels, a threshold defined as a 10 percent drop from a near-term high. Even after an afternoon rally erased the morning’s losses, the S&P 500 remains on pace for its worst month since March 2020’s COVID crash — and its worst start to a year in recorded history.

    Many Wall Street analysts believe that stocks remain far from their bottom. Morgan Stanley’s Michael Wilson, deploying a years-stale Game of Thrones reference, declared Monday that “winter is here” for equities. Legendary asset manager Jeremy Grantham, meanwhile, insists that we’re witnessing the catastrophic pop of the fourth “super bubble” of the past century. Some traders are more bullish about the market’s medium-term fortunes. But virtually all see near-term turmoil and are putting their money where their mouths are.

    So, what explains the sudden death of the pandemic rally? Myriad factors have contributed to the markets’ woes, but three developments have been especially critical:

    The S&P 500 forfeited its high on January 5, when Fed officials unveiled the minutes of their December policy-making meeting. Those notes revealed that the central bank expected to raise interest rates three times in 2022, in light of the tightening labor market and persistent inflation. This was a faster pace of monetary tightening than many traders had anticipated, and they adjusted their portfolios accordingly.

    By itself, the Fed’s notes didn’t trigger a stampede for the exits. But it durably shifted the mood among investors. And the new climate of bearishness was reinforced a week later, when new data revealed that December had witnessed the highest rate of inflation in four decades, a development that seemed likely to reinforce the Fed’s inclination toward tightening.

    Central bank policy always influences stock-market values. Equities compete with bonds for the world’s savings. When benchmark interest rates are low, stocks become a better value proposition, as the alternative to investing in risk assets is to accept little to no return on one’s capital. Savings therefore flood into stocks, propping up their value. By the same token, when interest rates rise, the relative appeal of bonds does, too, and savings slosh out of equities and into Treasuries.

    But the pandemic rally was even more sensitive to central-bank policy than most. After all, the Fed arrested the March 2020 crash — and birthed the ensuing boom — by taking unprecedented measures to increase the appeal of risk assets. Since the pandemic’s onset, the central bank has not only kept short-term interest rates near zero, but also bought upwards of billion in Treasuries every month. These purchases put further downward pressure on rates by ensuing healthy demand for the government’s bonds, no matter how low their return.

    The stratospheric highs of the major stock indexes reflected this tilted playing field more than it did conventional measures of their companies’ likely future earnings.

    Further, in part because the pandemic disrupted in-person service and retail firms more than digital giants, the COVID-era rally was powered by tech stocks. At the end of 2021, more than half of the S&P 500’s value derived from Apple, Microsoft, Amazon, the company formerly known as Facebook, Alphabet, Tesla, and the chipmaker Nvidia.

    Alas, tech stocks, especially smaller ones, are even more vulnerable to rising interest rates than the typical equity. This is because most tech firms are valued for their long-term growth potential. When the return on safe assets is negligible, the cost of locking up one’s capital in a risk asset that won’t pay off for years isn’t very high. But the more risk-free interest a present-day dollar buys, the less appeal “growth” stocks have.

    In 1955, then-Fed chairman William McChesney Martin argued that the central bank’s job during inflationary booms was to serve as the “chaperone” who “has ordered the punch bowl removed just when the party was really warming up.” One might say that, in the present context, the Fed is removing a punch bowl that it had previously spiked with MDMA, just as the partygoers’ serotonin levels were starting to fall.

    And traders fear that Jerome Powell & Co. will become even bigger party-killers after their meeting this week, in part because of another adverse development:

    When consumer prices first began spiking last year, both the Federal Reserve and investors were unperturbed. In their view, inflation would prove “transitory.” As the economy reopened, demand was bound to temporarily run ahead of supply, especially in sectors that were hard-hit by the pandemic. In time, however, markets would recalibrate. After all, an outsize portion of price increases were concentrated in a small number of goods. Once automakers revved up production, falling car prices alone would take a large bite out of inflation.

    A heavily caveated version of this analysis remains plausible. Although inflation has proven more persistent than the Fed had hoped, it remains relatively narrowly distributed. More than half of December’s 7 percent CPI increase derived from spikes in the prices of energy, new vehicles, and used vehicles. As Leslie Lipschitz and Josh Felman note in Barron’s, if you assume that the prices of those products will stay flat through 2022, while others continue to rise at their present rate, then inflation will fall by 4 percentage points this year.

    Yet markets can no longer have much confidence in an imminent stabilization of prices. If the pandemic subsides come springtime, that could ease some supply-side woes in the automotive sector. But it might simultaneously drive a demand-induced surge in the prices of restaurant meals, airline tickets, and hotel fares. More critically, the consumer-price index does not currently reflect the soaring cost of housing in the United States. The rate on a new lease is between 15 and 20 percent higher today than it was one year ago. The CPI’s measure of shelter costs remain dampened because a lot of tenants are still paying rental rates that were set nearly a year ago. As leases turn over, however, that measure will soar. And since housing accounts for such a large share of the typical American consumer’s spending, a 15 percent increase in rents would translate to a four-point increase in overall inflation.

    Meanwhile, private demand is likely to remain robust through 2022, as newly hired workers find themselves with more disposable income and middle-class Americans still have plenty of excess savings left to burn through.

    Beyond these structural forces, there’s a growing risk of a contingent inflationary shock. Russia is the world’s No. 2 oil producer, and Ukraine is one of the world’s leading energy hubs. Should the former invade the latter, analysts say that the price of oil could shoot up past 0 a barrel. Meanwhile, China’s “zero-COVID” policy is all but certain to fail when pitted against the exceptionally transmissible Omicron variant. Given the relatively low levels of natural immunity against COVID among the Chinese population, Omicron has the potential to cause severe outbreaks in the world’s largest exporter, further exacerbating supply-chain difficulties.

    If inflation were to once again exceed the Fed’s expectations, it could raise interest rates by even more than its December minutes projected. Such an occurrence would not only reduce the relative appeal of stocks to bonds, but also threaten to derail the broader economic recovery, depressing profits in the process.

    Finally, corporate earnings have not been robust enough to ease investors’ anxieties. Which isn’t to say that it’s been an especially bad earnings season. About one-fifth of the companies in the S&P 500 have filed their fourth-quarter results, and 82 percent of these firms beat analysts’ expectations. But stock valuations are forward-looking. And companies’ guidance to investors — which is to say, their official expectations for earnings in the months to come — has been lower than anticipated, with only a single S&P 500 corporation, Micron Technology, beating earning estimates and raising its expectations for future profits.

    None of this means that the present correction is bound to turn into a full-blown crash. It remains possible that, in the coming months, supply-side bottlenecks will ease, tensions between Russia and Ukraine will blow over, Omicron will leave Chinese exporters unscathed, and falling goods prices will mitigate the influence of rising rents. In such a scenario, inflation will cool off, the Fed will leave out a little punch, and stocks could very well recover their lost highs.

    But for the moment, investors aren’t betting on it.

    3 Reasons Why Stocks Have Been Plummeting

    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.

    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 Stock Is Falling Today - One Reason We're Still ...

    04-02-2016 · Why We're Bullish on Amazon Stock in 2016 Amazon shares have been caught up in this year's global stock market rout. Yet at a recent price of 1.88, shares remain nearly 60% …

    04-02-2016

    Amazon stockYes, Amazon stock has fallen nearly 11% in the last five trading sessions, and more than 21% in 2016 already.

    But we remain bullish on the Amazon stock price for one major reason. This one major catalyst is part of the reason Amazon has become a 0 billion company, and why the stock has climbed more than 1,200% in the last 10 years.

    First, here's why the AMZN stock price was dropping earlier this morning...

    Amazon.com Inc. (Nasdaq: AMZN) stock opened down today after a large mall owner backpedaled on his statement that the e-commerce goliath was preparing to build hundreds of brick-and-mortar bookstores.

    Sandeep Mathrani, CEO of mall operator General Growth Properties Inc. (NYSE: GGP), said on an earnings call Tuesday that the online giant is getting ready to open physical book stores.

    "You've got Amazon opening brick-and-mortar bookstores and their goal is to open, as I understand, 300 to 400," Mathrani said in response to a question about mall traffic.

    The idea of Amazon opening brick-and-mortar bookstores makes perfect sense. Amazon's storied roots trace back to its first days as an online bookseller. Since then, it has debuted the Kindle e-reader and shaken up the book publishing world.

    "Books are in our DNA at Amazon," Amazon Vice President Jennifer Cast said after the Seattle-based retailer opened its first physical bookstore in November. "It was the first product that we started selling. We were earth's biggest bookstore and so now we're one of the small bookstores too."

    Still, late Wednesday General Growth Properties issued an online statement saying the remarks from Mathrani were "not intended to represent Amazon's plans."

    However, Re/code reports Amazon is indeed working on a project to create retail stores of the future. And bookstores are just the start.

    According to Re/code, the Amazon retail store initiative is being spearheaded by Steve Kessel.  A longtime Amazon executive, Kessel's team launched the first Kindle. Details of Kessel's project have been kept quiet for a long time. But the November opening of Amazon's first physical bookstore stirred much speculation.

    Called Amazon Books, the store sells Kindle tablets and thousands of books in large part based on customer reviews from Amazon.com.

    The Re/code said Amazon will not only open up more bookstores, but it will eventually debut other types of retail stores. It's not clear what the stores will be like. But the report also said Amazon's mission is to create a physical store that transforms the traditional shopping experience.

    Physical stores located close to Amazon distribution centers would allow for quick and easy restocking, as well as speedy returns and exchanges.

    So the fact that Amazon officials backed off the brick-and-mortar store rumors gave investors pause.

    But despite today's early volatility, we remain bullish on the Amazon stock price at Money Morning. And this one major catalyst should continue to drive the stock in 2016...

    Why We're Bullish on Amazon Stock in 2016

     Amazon shares have been caught up in this year's global stock market rout. Yet at a recent price of 1.88, shares remain nearly 60% higher year over year.

    Amazon stock was the top performer in the broad-based S&P 500 Index during 2015. Shares more than doubled in 2015, climbing a blistering 122%. Driving the Amazon stock price was Prime membership, which offers two-day shipping for a annual fee.

    Amazon has become the one-stop, go-to retailer for customers wanting convenience, competitive prices, and quick delivery. It's come a long way from its original roots as an online bookstore.

    And Money Morning Defense & Tech Specialist Michael A. Robinson credits the vision of CEO Jeff Bezos for turning Amazon into the retail titan it is today. And it's that vision by Bezos that will continue pushing the Amazon stock price higher...

    "Analysts thought Amazon.com should stick to its knitting as an online store," Robinson said last month. "But what Bezos knew, and the Wall Street crowd missed, was something called the 'power of scale.'"

    Since that time, Bezos has turned Amazon into a retail powerhouse. In July 2015, Amazon surpassed Wal-Mart as the world's largest retailer by market value.

    Imagine what Amazon could do with physical stores.

    And Amazon is much more than a retailer...

    Amazon is a leader in web services and cloud computing. It's a formidable competitor in the entertainment space thanks to its streaming business. And it's at the forefront of technology with ventures including delivery by drone and the Internet of Things (IoT).

    "Bezos has once again broken ground for another multibillion-dollar web business," Robinson said.

    Amazon stock may remain volatile in the short term because of the broader market's volatility, but for long-term investors, Bezos' vision for the company is encouraging.

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