Analysis of Amazon share price

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Increasing numbers of traders and individual investors are becoming interested in the assets of major American companies among which those quoted on the Nasdaq are particularly popular. This is the case with the stock of the Amazon company, which experiences very significant annual fluctuations and therefore allows different long-term strategies.  

Latest news

Amazon acquires its own delivery Boeing aircraft

06/01/2021 - 14h28

In the midst of the aviation crisis, online retail giant Amazon has announced that it has purchased 9 aircraft from the Boeing group in order to deliver its products worldwide itself.

Elements that can influence the price of this asset:

Analysis N°1

As part of your fundamental analysis of this action, you will of course monitor with great attention the online sales sector in general and the evolution of demand.

Analysis N°2

Amazon's reputation is often damaged by the press and any event or communication in this regard can have a significant impact on the share price. This may include, in particular, legal cases or other social scandals.

Analysis N°3

The increasing diversification of the activities carried out by this group is also an interesting hints to study. All operations aimed at accelerating this diversification, such as the creation of strategic partnerships, company takeovers or joint ventures, will therefore be monitored.

Analysis N°4

Since Amazon's sales are made internationally, it will also be necessary to closely monitor the foreign exchange market as exchange rates can have an impact on the company's competitiveness.

Analysis N°5

Finally, although Amazon's competition is relatively poor, we will keep a close eye on the other major online sales companies and their major events, but also and above all on the evolution of the market shares of each of these major players.

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General presentation of the Amazon Company:

The Amazon Company is well known to one and all due to its major presence on the internet worldwide. Its major activity is online book sales but over the years the Amazon Company has diversified its activity sectors and now sells all kinds of cultural products such as CDs, DVDs, digital appliances, video games, household electrical appliances and even payable music downloads.

The majority of its turnover is from the United States but Amazon has managed to conquer the world and its activity is also strongly developed in Europe. Nowadays this company is one of the world leaders in online products distribution for the general public.


Major competitors of Amazon:

The Amazon Group is undoubtedly one of the companies in the e-commerce sector that has experienced the greatest success over recent years. Due to the development of diverse products and services and using a rational mobilisation strategy that is highly progressive in the use of its resources, the group has made its mark and distinguished itself from its competitors notably through the standardisation of these procedures. This is why Amazon does not have many real and direct competitors at this time. Among the companies that try to compete however we find the following:

Of course, Amazon causes great envy among would be competitors as it has shown it knows how to remain leader of its sector and is consistently highly innovative which helps it stay well ahead of any pretenders to the crown.


The major partners of Amazon:

Amazon hasn’t stopped developing new partnerships with businesses in sectors that are sometimes quite surprising. For example it signed an agreement with the Ford automobile company for the design of a device enabling the remote control of a car.

Amazon also created partnerships with Samsung in 2014 in the online content publishing sector using 4K monitors.

To conclude, in 2015 Nintendo also announced the implementation of a partnership with the Amazon Group like that of the Spanish Dia Company with whom they signed an agreement in 2016 for the online sale of their products.


Introduction and ranking of Amazon shares

It was in 1995 that Amazon was introduced to the stock market and incorporated into the Nasdaq calculation. Its results make it one of the favorite assets of traders in this sector, since Amazon makes around 35 billion dollars of turnover a year.

In just some years, the company has managed to make a profit of almost 40% compared to the previous year. Of course, Amazon suffered the consequences of the crisis and the explosion of the internet bubble in 2006 but has been able to bounce back by developing several services.

Amazon shares are therefore very popular with investors because of this company's ability to target new profitable activities, but also thanks to its successive acquisitions of companies whose activity is complementary to its own.


Important stock market information to know relative to Amazon shares:

To complete full and reliable analyses on the Amazon Company share price it is of course important to know the information given above such as the company activities, important dates and historical movements in the share price, but there are other more basic stock market details that are also necessary to know such as the following:


Economic and financial history of the Amazon Company:

To understand and better anticipate the movements of the Amazon Company share price it is important to know certain historical events that have marked its rise including the major acquisitions and financial investment participation. Here then are the major events to remember:

More recently, in 2017, Amazon purchased the internet distribution company Souq, highly present in the Middle East, an area that the company had trouble penetrating. Amazon recently announced the acquisition of a 23% shareholding in Plug Power, an American hydrogen battery manufacturer.


The different products and services offered by Amazon:

To be able to trade the price of Amazon’s shares with CFDs, it is essential to know very good the products and services offered by this company. This is what we propose you here by entering a little bit more in detail into the activities of this company.


Amazon’s online sales platform:

This is of course the most known activity of the group. This Marketplace platform allows professional and/or particular sellers to sell their products online, provided that their products are part of the Amazon catalog. The company is remunerated for each sale made, by a commission on the selling price, fixed shipping and handling prices and a fixed commission per object sold. Of course, the site also charges a VAT in accordance to the law.


Kindle, the digital reader:

In 2007, Amazon also created a digital book reader called Kindle, which has become a real emblem of the brand. This reader can also be used as a software for computers or tablets and is of course adapted to android and apple smartphones.

Amazon also sells reading licenses of a large number of books, which allows the buyers to have access to them from different media and platforms. Of course, these files remain the property of Amazon and are not really acquired by the user, who in fact only buys the right to read and consult.


Amazon’s video service:

This is one of the biggest projects of the company. Launched in 2006, Amazon’s video service is, as its name suggests, a video on-demand platform. The objective of this service is of course to introduce the company in a market, that is increasingly growing and to compete with the big giants of this sector such as Netflix and Google.

Amazon’s video service is already available in several countries including the United States, France, United Kingdom, Austria, Japan and Germany.

Even though it has not had the expected success, this service could gain notoriety with time if it adds a more varied and complete catalog of videos and with more competitive prices.


Amazon Mechanical Turk crowdsourcing service:

Less known than the other services we mentioned above, Amazon Mechanical Turk or AMT in French is an online micro-work service based on an internet crowdsourcing platform and launched in 2005. This platform allows people who are willing to take over certain dematerialized tasks in areas where artificial intelligence is still little evolved such as the analysis of image content or the production of various information.


Amazon’s Lockers service:

Through this service, launched in 2015, Amazon is seeking once again to stand out from the crowd in the field of online selling. Amazon Lockers is in fact a service of automatic orders placed in big cities such as Paris and Villeneuve D’Ascg in France and in other cities of the United States and the United Kingdom, which allows you to pick up what you commanded on its internet platform in some shopping centers.


Amazon’s cargo services:

Always seeking to minimize the cost and to master the entire chain of sales of its products, in 2016 Amazon launched a partnership with the airplane rental company ATSG in the USA to which he rents about 20 Boeing 767 cargo for a period of 5 to 7 years. These devices are used to deliver shipments from Amazon with the goal of gradually detaching from its dependence from traditional delivery companies such as UPS and FedEx.

But Amazon has gone a bit further in this sense since the company announced in 2016 that it was in negotiations with the British government to develop a project to deliver small packages with drones. Of course, the reliability of this project is still being studied because it has to deal with many legal and logistic constraints. If this project is finally completed, it will enable Amazon to deliver small packages in less than 30 minutes everywhere around the world.

Finally, always in 2016, Amazon showed once again its creativity by filing a patent concerning the installation of flying warehouses suspended by zeppelins, in order to accompany the delivery service of packages by drones.


The Amazon Go magazines:

In 2016, Amazon acted once again as a pioneer in the sector of automated work by launching the first food supermarket without a cashier in Seattle and it was called Amazon Go. This supermarket, first of its kind, is still being tested since it was created for and can only be used by Amazon’s employees.


Amazon Textiles clothing:

Thi is another sector in which we did not expect the giant Amazon to go in. The latter has indeed launched two textile brands with Goodtgreads and Paris Sunday, which are only sold online for the moment.


What are the advantages of Amazon’s shares as a stock market asset?


The disadvantages of Amazon as a stock market asset:

Of course, trading Amazon shares does not present only advantages for investors and the value has some flaws which are minor when compared to its numerous qualities, but they must nevertheless be taken into account.

Among some of the biggest weaknesses of Amazon we can list some problems related to the infringement of patents, which have been influencing the trust of investors for some time. The reliability of Amazon’s online platform, which has a tendency to go down regularly, is a recurrent problem that could worry the market.

Amazon also faces other important threats, including the collection of taxes on merchandises sold on the platform and reducing the margins by decreasing the competitiveness of the group.

Amazon also faces increasing competition in the sector of digital books with numerous newcomers every year trying to become part of the market.

Finally, the risk of exchange rate fluctuations could, depending on market conditions, slow down the company’s profitability internationally.

Frequently Asked Questions

How much is Amazon's market capitalization?

After the publication of the accounts for the 2019 financial year, the Amazon share reached a peak on the stock market. On 01/30/2020 the share jumped by more than 12% in a single session. The capitalization of this NASDAQ 'BLUE CHIP' crossed the legendary bar of 1000 billion dollars. Amazon now rubs shoulders with Apple, Microsoft and Alphabet, which are the only ones to display a valuation higher than that of the e-commerce giant.

What elements could cause the Amazon share to drop?

The evolution of Amazon's stock market price has become a success story in recent months. The share has increased by 2160% in 10 years!!! In January 2020 alone, it displayed a performance of + 18%. Amazon is now firmly seated as a world leader. The firm seems to have crushed the competition. However, as the expression goes, the Tarpéienne rock is close to the capitol. Amazon operates on 5 continents. Its turnover is multi-currency and permanently exposed to a sharp drop in a currency on the foreign exchange market. Its leading position now requires it to innovate in order to find new sources of growth. Worse, since most of its activities are linked to world trade and household consumption, Amazon would be hit hard by an economic recession. All these elements could bring the Amazon share price down so should be closely montiored.

Should the Amazon share be analysed in euros?

The Amazon share is one of the stocks that stands out for its high volatility on the stock market. Although the share price has been rising for 10 years, it also continues to oscillate from lows to highs. The stock is listed on NASDAQ in US dollars. If you're planning to buy the Amazon stock, you'll have to take into account the cost of the EUR / USD conversion when buying and when selling. However, rather than focusing on the evolution of currencies and the EURO equivalent value of the Amazon share, it would be better to analyze the opportunities to acquire this share at a low with the aim of short-term capital gain.

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Trade Amazon shares!
76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.