Amazon’s stock price has been on a robust run of late, hitting record highs in the first week of November amid a monthslong surge in the overall stock market. Despite some choppy waters in 2024, shares of the online retail giant are still up significantly for the year. And as we head into the holiday season, investors may be wondering whether Amazon is a good investment.
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Many experts expect Amazon to keep rising through the holiday season — meaning it could be a good time to buy the stock. Here’s what you need to know about Amazon stock this holiday season.
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Holiday Spending
The company should get a lift from a bullish outlook on holiday spending, as consumers face much lower inflation than in years past. During the 2024 holiday season, spending is expected to reach a record $902 per person on average across gifts, food, decorations and other seasonal items, according to an October survey from the National Retail Federation. That’s up from $877 last year and well above the previous record of $886 set in 2019.
This should be especially good news for a top retail player like Amazon, according to Anthony Grosso, a New York-based financial strategist and mortgage loan originator.
“There are no other retailers equipped to capitalize on the [seasonal spending] increase in the way that Amazon can,” Grosso told GOBankingRates. “Amazon is going to take a good percentage of it on logistics alone.”
No company is better positioned to capitalize on the holiday shopping frenzy than Amazon, according to Jason Brown, stock market expert at The Brown Report and author of “Five-Year Millionaire,” due to be published in January 2025.
“With inflation coming down, many of the products sold on Amazon either will stay at the same price — creating better profit margins — or the price of the products will be reduced, allowing consumers to afford and shop more while Amazon and its sellers profit through sheer volume of sales,” Brown said.
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Strong Earnings
It helps that Amazon is coming off a strong third quarter earnings report. The results helped ease some doubts about the company on Wall Street, Investor’s Business Daily recently reported. It cited FactSet research showing that more than 90% of the 70 stock analysts following Amazon have a “Buy” rating on the stock, with an average price target of $232.72.
David Materazzi, CEO of automated trading platform Galileo FX, said Amazon’s stock “could soar” due to strong holiday sales and growth in its Amazon Web Services (AWS) business.
“AWS is the powerhouse driving most of its operating income with impressive profit margins,” Materazzi said, adding that the retail side is thriving as well due in part to efficiency improvements.
Potential Risks
But there are also some risks to keep an eye on. Materazzi cited the potential for cautious consumer spending, uncertainty surrounding Amazon’s Project Kuiper satellite broadband network, regulatory scrutiny and rising competition from other retailers.
Rising competition from other retails could be especially prevalent this holiday season. However, the company’s stock is still in a strong position heading into the holidays.
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This article originally appeared on GOBankingRates.com: Is Amazon Stock a Good Buy This Holiday Season? Experts Weigh In
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
