Amazon’s stock (AMZN) will be stuck in the criminal court for most of 2021 as investors see what new CEO Andy Jassy has rolled up its sleeves and the company’s growth is slowing after a big 2020 as people shopped more online at the height of the pandemic.
Veteran tech analyst Mark Mahaney from EvercoreISIA thinks Amazon’s stock still has a long way to go before it starts a sustained upward climb.
“Amazon’s stock awaits an unlock,” Mahaney said on Yahoo Finance Live. “Amazon is entering a new investment cycle, especially in retail infrastructure and distribution. They are really trying to capture one day delivery, and what I call super same day delivery. If they can demonstrate that they can make a return on that, which I think they will and will show accelerated spending from customers, then investors will look beyond the short-term margin pressure and stocks will still rise, we’re waiting for that, and we’ll have that unlock sometime in the six to twelve months in the near future.”
The pressure on Amazon’s stock as investors weigh the results of the investment cycle is pretty obvious.
Amazon shares are up just 5% over the year, bad lagging behind double-digit profit for the Dow Jones Industrial Average, Nasdaq Composite and S&P 500.
The stock is also the worst member of the closely followed FAANG [Facebook, Amazon, Apple, Netflix, Google] complex. Best performing Google has made a profit of 62% in the year to date as investors are impressed by the growth in YouTube and cloud services.
Zoom out on a Yahoo Finance Plus chartAmazon’s stock has remained virtually flat since early July 2020. From March 2020 (the peak of the pandemic hysteria and lows for the broader stock market) to July 2020, the stock was up some 68% as traders braced for a major acceleration in Amazon’s stock market. grow.