Amazon Primes the Markets: Will It Maintain Its Current High?


Amazon may well be one of the world's most dominant corporate entities, with a highly successful global product delivery business, a hugely popular movie and TV streaming service and, most prominent of all, access to all data via its AWS cloud hosting service.

To illustrate some of the magnitudes of AWS' market share, the majority of the world's non-bank financial market providers have to use AWS to report their transactions to global regulatory authorities. This means that Amazon's internet services division is privy to the world's retail financial markets data, as well as a huge range of other industry sector information, and that is on top of all of the subscription fees.

Amazon, therefore, is one of the world's giants in almost every area of everyday life. The company's stock is, as a result of its status as an international societal and commercial linchpin, one of the most traded stocks on New York's markets.

Interestingly, over the past few weeks, AMZN stock has been growing significantly in value. It is common for stocks of such highly capitalised companies with a vast and diverse customer base to be very stable and non-volatile, and that is very much the case for Amazon. Therefore, a sudden upward move from $127.82 to $131.06 on Friday last week was an interesting direction for an otherwise very steady stock.

Indicative pricing only

By Monday this week, the AMZN price had increased even more, arriving at $131.19 by 10.00 am CET, and this level has been steady since, putting Amazon stock at its highest value in six months. During the late hours of the trading session in New York yesterday, however, the value began to decrease, albeit not to the levels before the rise last week.

Today, the market will open in New York with Amazon stock at $130.22.

Yes, this is higher than last week, and when looking at the value over a six-month period is very strong, but it does represent a cessation of the upward direction, which took it over $130 last week.

What Events Will Affect the Market Going Forward?

The immediate direction which Amazon stock may take is interesting indeed. Here we have one of the highest capitalised, and most stable companies in the world, which has just been on a nice and steady upward climb taking it to its six-month high early this week, which only yesterday showed signs of slowing down.

The slowdown is perhaps something to consider, as it is not in keeping with forthcoming events.

Every year, Amazon has its own version of the now international 'Black Friday' event, in which retailers discount items and people across the globe go on shopping sprees searching for bargains. Amazon's online emulation of this is called "Prime Day", and this year's event will take place on July 11 and 12.

The two-day event is massively popular and was a clever move by Amazon as it takes the 'Black Friday' ideology online and engages an already familiar audience. Just to give some insight into the amount by which this boosts Amazon's revenue, in 2021, Prime Day sales reached $11.19 billion and represented a 7.7% increase over Amazon's 2020 event.

Those figures are particularly fascinating because 2020 was a year in which online shopping became the norm for millions of people, whereas by 2021, many retail businesses were open, and life was normal. It seems that Amazon captured the moment with this idea.

In the advent of such a huge event which brings massive revenues to Amazon, to see a stock rally begin to slow down is a point worthy of note. Let's see how the stock performs during the next few days and after Prime Day, when Amazon will reveal how much it made in just two days.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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