After a disastrous 2022, Amazon (AMZN) Stock is off to a hot start this year.
The tech giant’s shares were up 10.9% through Thursday afternoon, according to data from S&P Global Market Intelligence. This was largely due to the expansion of the Prime purchase program and the upward trend in equities. Investors are betting the market will bottom out after last week’s strong jobs report and today’s consumer price index continue to ease inflation.
The main news in the stock’s rally this week was the announcement of Buy with Prime, which allows Prime members to take advantage of Prime benefits such as free shipping and returns on sites other than Amazon.
The company launched the program in April, but it was only open to online retailers who already had a relationship with Amazon and used Amazon’s fulfillment services.
Buy with Prime will be open to all eligible U.S. merchants after January 31, according to the company.
Early results show that the Prime badge had a positive impact on retailers who used it, with an average lift of 25% in shopping conversions. Amazon bulls believe Buy with Prime will help the company steal business Shopify And because we can potentially capture a share of every e-commerce company’s sales, we significantly expand our reachable market.
Macro news also helped stocks rebound as reports of both jobs and inflation led investors to believe that inflation could soon normalize and the Federal Reserve’s rate hikes could end soon. .
It remains to be seen if Buy with Prime will make a difference for Amazon. The idea sounds promising, but the company is also cutting jobs, laying off 18,000 corporate employees and closing warehouses. Additionally, Amazon’s customer satisfaction scores are dropping, with some Amazon customers saying that the labels have become meaningless because deliveries take much longer than they used to.
Still, stocks look cheap after last year’s sharp decline, especially if the economy can avoid a deep recession. If macroeconomic data remain favorable, we expect the recovery to continue.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jeremy Bowman has held positions at Amazon.com and Shopify. The Motley Fool recommends Amazon.com and Shopify. The Motley Fool recommends options for a long $1,140 Jan 2023 call on Shopify and a short $1,160 Jan 2023 call on Shopify. The Motley Fool’s U.S. headquarters has a disclosure policy.