Holiday shopping season is here. And with consumers still looking to online shopping as the novel coronavirus pandemic continues to surge, online retailers are scooping up sales. That said, Amazon (NASDAQ:AMZN) is leading the charge. Despite what is shaping up to be a holiday quarter that shatters records, AMZN stock remains off its September high by more than 10%. To me, that represents an opportunity to scoop up AMZN shares on the cheap.
Once the holiday quarter numbers are released, look out. The company’s fourth quarter encompasses the delayed Prime Day event, Black Friday, Cyber Monday and Boxing Day. When those numbers are eventually published, my guess is AMZN stock is going to go through the roof.
All Signs Point to a Blowout Q4
Collectively, Amazon’s fourth quarter is traditionally when its sales and revenue are highest. There are big shopping days in that holiday quarter: Black Friday, Cyber Monday and Boxing Day.
Yes, like many other things, 2020 will be different for Amazon. But in a good way, especially if you own AMZN stock. There are still the big three shopping days to look forward to. In addition, the pandemic has resulted in online shopping getting a huge boost in popularity in general. And in 2020, Prime Day — Amazon’s biggest shopping event of the year — was delayed. It ended up being held on October 13 and 14.
Therefore, Amazon’s fourth quarter is going to include sales from Black Friday, Cyber Monday, Boxing Day and Prime Day — all multiplied by the overall increase in online shopping popularity. That is going to be a blowout Q4, and AMZN stock is going to react to those numbers.
Don’t Worry About the Vaccine
There are now two major coronavirus vaccine candidates. That is fantastic news. We’re not out of the pandemic woods yet, but there is an end in sight.
However, if your portfolio includes e-commerce stocks like AMZN, the news about a vaccine may have you a little worried. After all, online shopping has surged because of the pandemic. At first because retailers were forced to shut their doors during the initial lockdown. In turn, online shopping was the only shopping option. Then, we entered a phase where online shopping was safer. So what happens when we’re no longer worried about being exposed to the coronavirus when we go into stores?
Overall, I’m not concerned. Consumers were already shifting to online shopping. It’s just way more convenient, and often cheaper as well. That said, the pandemic encouraged many who had never done so before to shop at Amazon. And now that they’ve done it, chances are they’ll continue to do so.
In fact, a report published several months ago concluded that the pandemic has accelerated the shift from physical stores to online shopping by roughly five years.
Bottom Line on AMZN Stock
In January, Amazon reported its fourth quarter 2019 earnings. Sales were up 21% year-over-year to $87.4 billion — but that did not include Prime Day. Because of this success, AMZN stock popped 7% the next day. Within just under three weeks, it had gained a total of 16%. Then the pandemic hit, the stock market crashed and Amazon stock gave up those gains and then some.
The point is, I expect the market to react strongly to Amazon’s holiday sales numbers this year. And with the pandemic-fueled shopping from home in the mix, plus the two-day Prime Day event from October added to this year’s Q4 numbers, I fully expect Amazon to blow past that 21% YOY sales gain from last year.
As a whole, the great thing about an Amazon investment is that it will keep growing in value. Even if for some reason Q4 manages to disappoint, or the market gets spooked over big tech stocks again, AMZN stock is as safe as it gets.
It has its stumbles, the latest has been the slump since September. But in hindsight, they always turn out to have been buying opportunities. This is an “A-rated” stock in Portfolio Grader that has spent the past 20 years on a consistent upward trajectory. So when it’s down, smart investors snap it up.
On the date of publication, Louis Navellier had a long position in AMZN. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.