Prime Day 2017 was a huge success. The one-day annual event, which began in 2015 as a celebration of Amazon.com, Inc.’s (NASDAQ:AMZN) 20th anniversary, was the company’s biggest sales day ever. Sales grew 60% year-over-year, surpassing the high bar that was set on Prime Day 2016 as well as those brought in on the latest Black Friday and Cyber Monday. That news sent AMZN stock back above the $1,000 mark for the first time in weeks.
For those of you who are unfamiliar with it, Prime Day is an annual sale that’s geared toward technology. Deep discounts and giveaways are offered, as well as fourth months of unlimited music for just 99 cents through Prime Music.
The catch, of course, is that you have to be a Prime member, which costs $99 a year or $10.99 a month. A subscription includes additional benefits like free two-day shipping as well as access to Prime Video and Prime Music.
I suspect the event began as a response to Alibaba Group Holding Ltd’s (NYSE:BABA) Singles’ Day, which was created in the 1990s by Chinese university students as a counter to Valentine’s Day. For the moment, there is very little comparison between the two, as Singles’ Day has become a cultural celebration in China and other parts of Asia.
According to Amazon, “tens of millions of Prime members” across 13 countries purchased items across the 30-hour sale, which was up 50% over last year’s 24-hour event that involved fewer nations. In addition, management said that more people signed up for Prime on July 11 than on any other single day in AMZN’s history.
If you logged on to check out the discounts at all throughout the day, I’m sure you can guess what the most popular item was: the Echo Dot — an AI personal assistant activated by voice that, along with the larger Echo, Amazon hopes will become the center of the smart home. It was featured on Amazon’s home page and cost $15 less than usual.
AMZN stock soared on Wednesday following the strong results and is now back trading above the $1,000 threshold. There’s no question the hyped-up sales event worked out well for the company this year, but I still think it has a long way to go before really moving public and stock market needles.
It has that much potential.
I’m sure Amazon will work that out, but beyond the gimmicks, management continues to do all the right things here — with invading the grocery, furniture and meal-kit markets being the latest examples.
In the meantime, I suspect the stock could meander a bit with the overall tech industry. However, I think betting against AMZN stock is a major mistake. For long-term investors, Amazon is a buy and hold because for so many Americans, every day is Prime Day.
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