Amazon Prime Day is here - some investors are not sold
Leon Neal
Amazon (NASDAQ:AMZN) traded slightly lower in early action on Tuesday with the e-commerce giant's annual Prime Day event in full swing.
Analysts think the 45-hour Amazon Prime Day event will be a significant test of consumer discretionary spending ahead of the back-to-school and holiday seasons in the back half of the year. Jassy mentioned recently that people are still shopping, but hunting for better discounts. Early data tracking shows solid keyword interest and traffic for Amazon (AMZN), but there have also been reports of shopper frustration over the "invite only" deals sent to some Prime members. The program allows customers to request an invitation to purchase discounted items that Amazon (AMZN) expects might sell out, particularly some tech products.
On Wall Street, Wells Fargo added Amazon (AMZN) to the firm's Signature Picks portfolio. The firm said it was attracted to Amazon (AMZN) because the company is at a positive inflection point in both North American retail and AWS, particularly with North America's retail's underappreciated margin upside. The Wells analyst team sees a multi-year positive revision cycle in North America retail and healthy growth resuming at AWS in Q4 of 2023 and beyond
On the flip side, respected London-based investment management company Fundsmith sold out of its Amazon (AMZN) position in Q2. Fundsmith CEO Terry Smith warned on a misallocation of capital by Amazon (AMZN) in grocery retail after the Seattle-based company already stubbed its toe with the Whole Foods acquisition. "Where companies choose to invest outside a powerful core franchise in which they already have expertise we believe they are likely to destroy value," he noted. Fundsmith's first-half letter to shareholders can be read here.
Shares of Amazon (AMZN) fell 1.20% in morning trading on Tuesday to $128.85 and are now flat for the last three weeks of action. AMZN still trades comfortably above its 100-day and 200-day moving averages, and is up close to 48% year-to-date. The recent past suggests that Amazon (AMZN) Prime Day is not the near-term catalyst that it once was. In the past four years, AMZN shares has fallen in the same week as the two-day shopping extravaganza.
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