Amazon’s Stock Poised for Success After Prime Day

Prime Day, Amazon’s exclusive sales extravaganza for Prime members, is just around the corner. Scheduled to take place on July 11th and 12th this year, the event is perfectly timed to cater to bargain-hungry shoppers. Given its historical performance, Amazon’s stock has the potential to outshine previous years.

Interestingly, Amazon’s stock traditionally sees a positive trajectory following the conclusion of Prime Day festivities. Based on data obtained from Dow Jones Market Data between 2015 and 2022, when the event occurred in mid-July (except for October 2020 and June 2021), the stock witnessed an average increase of 0.4% on the day after Prime Day ended, 1.3% in the week following the event, and an impressive 4.4% within the month that followed.

Undeniably, Prime Day has proven to be a tremendous boon for Amazon’s business. Last year alone, members worldwide purchased over 300 million items during the sales event, setting a new record for the company. With this year’s Prime Day right around the corner, there is an optimistic outlook that it will surpass even greater heights.

Prime Day Expected to Drive Strong Sales for Amazon

Analyst predicts potential growth in gross merchandise value (GMV) for Amazon during upcoming Prime Day

In a recent research note, BofA Securities analyst Justin Post suggests that Amazon’s Prime Day event will likely exceed expectations. Post anticipates a significant increase in merchant participation, faster deliveries, and substantial discounts, which are expected to appeal to price-conscious consumers. The analyst believes that this could potentially lead to a 12% growth, or even more, compared to the Prime Day held in July of last year. This positive outcome may also set the stage for a modest acceleration in Amazon’s GMV during the third quarter.

Consumer outlook remains cautious despite recent rise in consumer confidence

Despite the rise in consumer confidence index, which reached its highest level since January 2022 in June, consumers still maintain a cautious outlook due to consistently high inflation and rising interest rates. The expectations index, which measures consumers’ short-term income outlook, remains low. This indicates that shoppers are bracing themselves for a possible recession within the next six to twelve months.

Renowned analyst Justin Post emphasizes that the current environment is conducive for Prime Day ’23. He highlights the trend of increased cost-consciousness among consumers, as noted by multiple retailers, including Amazon.

Amazon stock performance and conclusion

On Monday, shares of Amazon experienced a slight decrease of 2.3%, bringing the stock price to $126.79. However, it is worth noting that the stock has already seen an impressive 51% surge since the beginning of this year.

In conclusion, with the highly anticipated Prime Day on the horizon, all eyes are on Amazon. Analyst Justin Post believes that a successful Prime Day may lead to significant growth in GMV for the company. Despite some concerns over inflation and interest rates, consumers continue to search for deals and discounts. The outcome of Prime Day ’23 could potentially have a lasting impact on Amazon’s performance in the coming months.