AMZN

Amazon (AMZN) retreated 1.85% to $219.33 in the first Amazon Prime Day trade session on July 8. This was a stark market's response to initial consumer spending data in early hours of Prime Day sales, when revenue numbers showed -14% YoY. This fact could question the relentless uptrend from $165 since April 21. Shares of the world's largest e-commerce platform have climbed more than 35% over the last 11 weeks. Remember that I had put Amazon as one of my top picks in April, despite tariff threats, as Amazon's ability to attract investors was far exceeding the upside potential of Apple, for example. Those assumptions turned out to be entirely adequate for the moment, so that Amazon price recently achieved all my intermediate targets. Will I change my opinion about the company's future prospects now? Of course, it would be a mistake if I would say as if the first day of Amazon's annual sales was actually not a disappointment. Indeed, it was. But it's worth knowing at least a couple of important nuances.

First, Amazon Prime Day 2025 lasts four full days this time instead of just the usual two. This alone could ensure a record-breaking result overall during this promotion period, which ends on July 11. Prime Day, being the global shopping event, is evolving. It was launched in 2015, i.e. 10 years ago, as a 24-hour "gig". In 2017, it went up to 30 hours, then to 36 hours in 2018. In 2019, Prime Day became a two-day "bonanza". Now it is twice as long, which should inevitably stretch out the effect over time. Shoppers now have more time to be selective about their choice of products, rather than jumping on the first to take it on as soon as possible. They are trying to find the best offers. Thus, by the end of this de facto Prime Week, Amazon's overall result will be much better. Adobe Analytics forecasts a record $23.8 billion in sales in Prime Day 2025 spending from July 8 to 11. That would represent a 28.4% growth from last year's achievement, which was already very high. This is going to become an equivalent to two Black Fridays, which brought $10.8 billion to Amazon in 2024.

Second, competing promotions are also here, right on the same dates. Walmart (WMT) just kicked off its "Walmart Deals" on July 8 and extended its event from four days to six. Target (TGT), Best Buy (BBY) and Kohl's (KSS) did it in the same manner. This again means that you don't count your chickens before they hatch. Comparing Amazon's result with rivals will be the crucial point, and it will be possible only next week. I would therefore assume that the bottom of the current downward correction may occur sometime this Wednesday or at least before Friday, and it's unlikely that the market may postpone new buying opportunities in Amazon any longer. The rollback itself, and its bottom, will be short-lived, and most likely not lower than $210, or at least not much lower than this mark.

Third, it's worth noting that the extension of Prime Day dates gives Amazon more chances to increase its profit on advertising, which is clearly the fastest-growing segment of Amazon sales business. Let me add here that the cloud data segment is growing even much faster for Amazon than its e-commerce part. Cloud sales are doing excellent, according to last quarter's release. Cloud gains are robust, not depending at all on any Prime Day results and will further support the stock.

After all, there are long-term statistics that is behind it all. Historically, Amazon shares gained more than 2% on average in the week after Prime Day and over 4% for any 6-week period after the event. Average price target for Amazon from Wall Street is now at $242.42, and I personally bet on even $250 to $260 before the end of 2025. If we are lucky enough to buy at least around $210, that's $40 to $50 in terms of our gain per share, or 19% to 24% return. This game is worth the candle!