Amazon stock price fell 1.14% yesterday, although it regained some of this loss by the end of the trading day. Is this bad news for its shareholders or is this an opportunity in disguise?
One of the main tech giants, Amazon started the week on a negative tone. Yesterday, the stock price dipped as low as $3,387.25, or approximately 1.14%. Is this bad news? Or should investors take advantage of this discount, bracing themselves for new highs as holidays are around the corner?
Let’s find out more about Amazon and why it may be a great opportunity right now.
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What Is Amazon?
Amazon is one of the Big Five tech companies in the U.S. It focuses on e-commerce, digital streaming via its Amazon Prime service, cloud services, and artificial intelligence.
Should I Buy Amazon Today?
Yesterday, Amazon’s stock price dipped about 1.14%, although it did recover some of the lost ground by the end of the trading day. The main driver behind this drop is analysts changing their price estimates. Morgan Stanley, for instance, lowered its price prediction from $4,300 to only $4,100.
The change came as the company planned to hire more than 125,000 drivers and warehouse workers. The hiring spree started earlier in September when the company announced more than 40,000 new jobs. Analysts changed their estimates due to labour-cost inflation which will eat into Amazon’s profits.
Yet, to some other investors, it may seem like Amazon is getting ready for the holiday season. They may actually beat their competitors once again by offering timely deliveries. The only remaining question is whether higher labour costs will be offset by selling more goods and services this holiday season. In this case, the stock price may rise in line with its Q4 results. Another solution may be for Amazon to raise the costs of some of its services, such as Amazon Prime, to cover higher expenses.
Amazon Price Prediction 2021
Analysts expect a high price target of $5,000 in the next 12 months. The median estimate, $4,100, is more than 20% higher compared to its current share price of $3,405.8.
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