In the past, holiday shopping meant bundling up in your warmest coat and heading out to the local mall. All the while, you were hoping the items your kids asked Santa for are still in stock. These days, holiday shopping means opening the Amazon (NASDAQ:AMZN) app on your phone.
Amazon’s stock price has been trailing over the last six months, after hitting a market valuation of over $1 trillion in 2018. Last month, the company’s shares dropped slightly after its third-quarter earnings report missed Wall Street forecasts.
Fortunately for Amazon, the company has become synonymous with holiday shopping, so this should give it the boost it needs. Here are four things to expect from AMZN stock in the coming months.
Amazon Is Kicking Off the Christmas Season Early
The Christmas shopping season officially kicks off on Thanksgiving, and unfortunately for retailers, Thanksgiving falls on Nov. 28 this year. This gives companies a slightly tighter timeline to work with.
This is why AMZN decided to take matters into its own hands and kick off the holiday shopping season early. The company is launching an eight-day Black Friday event which begins a week before Thanksgiving. It’s a smart move and will give the company a jump start on its competitors.
AMZN Stock Will Have More Competition This Year
But make no mistake, Amazon will face tougher competition this year. Both Target (NYSE:TGT) and Walmart (NYSE:WMT) have greatly improved their digital channels over the past year. In response to Amazon’s one-day shipping for Prime members, both companies now offer same-day delivery subscriptions.
And let’s not forget about Costco (NASDAQ:COST), which continues to thrive thanks to an almost cult-like following from its members. Of course, the biggest draw Costco has is visiting its stores, wandering the aisles, and seeing what kinds of great deals you can find. The company has also taken steps to improve its digital presence. Costco’s e-commerce sales currently account for over 20% of its revenue.
Amazon Is Beefing Up Fulfillment
This year, the big news surrounding Amazon has been the company’s shift to free one-day shipping for Prime members. AMZN also announced it was eliminating its monthly $14.99 subscription for AmazonFresh.
Now Amazon customers will receive free same-day shipping on grocery delivery. These efforts seem to have paid off, and the company’s sales have taken off in recent quarters.
The Company’s Investments Will Hurt Its Earnings
For investors, there is an upside and a downside to all of Amazon’s recent investments. These investments allow the company to continue to grow, and increase its overall revenue year-over-year. But in the short-term this will hurt the company’s earnings and profitability.
However, Wall Street doesn’t seem too concerned when it comes to Amazon and the Amazon stock price. Out of the 34 analysts reviewing the stock, every one of them has given the company a “buy” rating. Earnings may be down for a period of time, but AMZN stock is a long-term growth company that is worth investing in.
As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities.