Amazon Is the Pandemic’s Wildest Ride

In a world where you risk your life going to the store, (NASDAQ:AMZN) is undergoing hyper-growth. At scale. The company that averaged $70 billion in sales per quarter during 2019 is now averaging $90 billion. AMZN stock that cost $1,500 per share a year ago, and was expensive at that, is now over $3,000 and considered cheap. 

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Amazon has taken over northern Virginia. It’s turning stores into warehouses. Its once underperforming Whole Foods stores are being overwhelmed by Prime members. 

It’s not just here. The pandemic has let Amazon conquer markets that once looked unconquerable, like Italy. Its Prime Day discount sale, pushed to October by the pandemic, is getting coverage once reserved for Black Friday.

Not All Glory

Any company that grows this fast, at this scale, is going to have problems.

Amazon’s includes a scam perpetrated with the help of ex-employees who allegedly gamed its online system on behalf of other crooks. Consultants to its Amazon Marketplace allegedly bribed employees and contractors to get their products unfair advantages. The consultants were in the U.S., and one of the indicted employees was in India.

The company itself is accused of restricting rivals from buying ads at its site. Makers of smart speakers, video doorbells, streaming sticks and other hardware that compete with Amazon are being kept out of an ad marketplace that was worth $15 billion last year. Roku (NASDAQ:ROKU) can’t even buy ads there and Peacock, the new streaming service from Comcast’s (NASDAQ:CMCSA) NBC Universal, isn’t available on the Fire stick. 

These kinds of things aren’t a big problem for a small company. For one struggling with accusations of monopoly, with powerful enemies in Washington, it spells danger.

Analysts Laud AMZN Stock

Most analysts are ignoring the problems and pounding the table for AMZN stock.

Their average one-year price target is over $3,700/share, 20% ahead of its Sept. 28 opening bid of $3,150. There are now 37 analysts following Amazon and every single one says “buy.” I’m a long-time Amazon bull and even I’ve been blindsided by its rise. I sold a few shares at $2,600, although most of my position has been intact since Amazon was at $330 in 2013.

For the quarter now ending, analysts expect sales of $92.5 billion and profits of $7.50/share.   Revenue would be up nearly 35% from a year ago, a quarter where Amazon bragged on year-over-year growth of 24%.

Amazon’s Hardware Day, which featured a home drone, new Fire stick and spherical Echo speakers, drew as much coverage as Apple’s (NASDAQ:AAPL) product announcements. Amazon is labeling 25,000 products “Climate Pledge Friendly.” Its new ads feature drivers passing windmills and a promise to be “carbon neutral” by 2040. Its warehouse automation efforts are gaining acceptance because Amazon’s employee count keeps rising.  It now has a cloud gaming service, to go alongside services for books, TV, and music.

The Bottom Line

I’ve said this before. is infrastructure. The store, the cloud and the warehouses were all designed as means to the end of transforming markets.

What was private infrastructure is now becoming civic infrastructure.  Amazon’s Sidewalk service will link Ring doorbells, Alexa speakers and Tile security devices on the scale of a neighborhood, using Bluetooth. Its new Amazon Fresh stores, just now starting to launch, will be integrated with its online capabilities in ways Whole Foods stores aren’t.

AMZN stock is still smaller than Walmart (NYSE:WMT) on revenue, and will be next year. But at its present rate, expect it to pass Walmart by 2023. Whoever is president then will have to deal with a company of unprecedented power. To Amazon, that president will be a local councilor. That achievement will be both good, and bad, for Amazon stockholders. Its enemies list is certain to grow. The risks to Amazon are no longer business risks, but political ones.

On the date of publication, Dana Blankenhorn owned shares of AMZN and AAPL.

Dana Blankenhorn has been a financial and technology journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Write him at or follow him on Twitter at @danablankenhorn.

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