Is Amazon (NASDAQ:AMZN) a buy? The age old question that investors face. At $3,221.26 per share, there are not too many retail investors that have the funds to load up on the consumer giant. Sure, there are fractional shares now but how long does it take to buy a $3200 share that keeps going up? But most investment advisors will tell you, do not focus on the price of a single share, focus on the company that you are investing into. And frankly, does it get any better than Amazon? With two weeks until Prime Day, is there a reason for investors to take the dive into the stock now? Let’s take a look.
Annually, Prime Day is the biggest event of the year for Amazon and one of the biggest for the retail industry in general. In 2019, Prime Day provided the company with $7 billion in sales from over 175 million items sold worldwide. That’s more revenue in one day than a lot of companies make in a year. But Amazon is expecting an even more profitable Prime Day this year due to the fact that during the COVID-19 pandemic, Prime Membership has surged. In fact, there are estimates that by the end of 2020, Amazon may hit 200 million global Prime Members, which would indicate an addition of 50 million members throughout the year.
Prime Day is usually held in the middle of the summer, but due to the COVID-19 pandemic having an impact on supply and distribution chains, the event has been delayed until mid-October. Not only is this going to make for another strong quarter for Amazon, but it is certainly going to kickstart early holiday spending by consumers, as presumably a record number of people will be shopping online instead of taking the risk of heading into malls in person. This is going to kick off three consecutive months with major events that will include Black Friday in November and the usual Christmas shopping rush in December. Amazon decimated its most recent quarters earnings which propelled the stock to new all-time highs in early September. With Prime Day included in the next quarterly earnings call in early November, we could see two more massive quarters from the company before the end of their fiscal year.
So is now the time to get into Amazon? It just may be. Other expensive stocks like Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) recently underwent stock splits, but Amazon has never shown any interest in doing so at its current valuations. With the pandemic looking like it will continue into 2021, the need for consumer staples to be delivered to our front doors will be more important than ever. Amazon sits on the precipice of being an even more dominant part of our lives than ever before. With WalMart (NYSE:WMT) recently announcing its WalMart+ competition for Amazon Prime, it is more important for Amazon to establish itself as the eCommerce leader around the world. So is the stock a buy? If you can afford it, Amazon shares have never disappointed anyone. But you may want to do so before the numbers for Prime Day are released, as this may be the most affordable Amazon is for a long time.
Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.