Selling Amazon On Recession Risks (Downgrade)

Summary:

  • Amazon’s overreliance on AWS and potential regression in e-commerce segments pose downside risks amid rising unemployment and consumer spending pullbacks.
  • Historical net margin trends and economic indicators suggest a challenging environment, with potential stagflation and reduced holiday sales growth.
  • Despite AWS resilience, valuation concerns arise as North America’s performance faces economic risks that threaten Amazon’s bottom line.
  • Given these factors, I am reversing my Buy recommendation, awaiting further economic data into 2025.

Neon Shopping Carts and Smartphone

AntonioSolano

I was positive on Amazon (NASDAQ:AMZN) stock almost a year ago, and the share price has improved by around 29%. I am now reversing my outlook on the company and will explain why I believe the downside


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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