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There is no other sales day as big or important as this one. Amazon (Nasdaq:Amazon) Prime Day this year takes place on July 16 and 17. The online store generated $12.9 billion in revenue on Prime Day last year, accounting for 2% of its annual revenue, making Amazon shares even more reliable.
Prime Day and Amazon Stock
As history makes clear, this isn’t the first time Amazon has hosted this kind of party. Alibaba Group Holding (Nasdaq:Baba) first instituted “Singles Day” in 2009, creating a pseudo-holiday where unmarried Chinese men and women could indulge in luxury.
But Prime Day offers Amazon some unique advantages: It gives it a chance to test its infrastructure and delivery network during the off-season, away from the crowds of the holiday season, and it also serves as a promotion for Prime itself, whose 230 million members generate more than $32 billion in revenue for Amazon, most of it in profits.
Prime Day also tells us a lot about the health of the consumer market, with half of the event’s sales coming from American consumers.
It’s no wonder the market hit its lowest point around October 2022, when Amazon held its second “Prime Day,” now called “Big Deal Day,” Amazon’s clearance sale that kicked off the holiday shopping season.
If a recession is on the horizon, you might be able to find out with a tracker developed by retail research firm Numerator to gauge industry trends for the day, as well as the potential rise or fall of Amazon stock.
Prime Day is important to everyone
Amazon is already stimulating the economy with early sales on items like coffee machines. Keurig Dr. Pepper (New York Stock Exchange:giraffe), apple (Nasdaq:AAPL) There are also special items like pencils and cat water fountains.
Electronics are the highlight, there are tons of back-to-school items, and “lightning sales” will run every hour for impulse shoppers. The Amazon Live channel will also feature demonstrations of the latest products. Amazon is also copying all the hallmarks of previous sale events, including coupons.
Like St. Patrick’s Day, Amazon Prime Day has become a season all its own. the goal (New York Stock Exchange:target) and Walmart (New York Stock Exchange:World Trade CenterAmazon.com Inc. now times its summer sales to compete with Prime Day, and it’s proven to be a winning strategy for many businesses.
Chinese Pinduoduo (Nasdaq:PDDD) has also gotten in on the action with its Temu store. Amazon now wants to fight back by shipping products directly from Chinese manufacturers.
Conclusion
As I wrote last week, Amazon stock is something to hold, not trade, and the fact that founder Jeff Bezos is cashing out some of it to fund his champagne-drinking retirement doesn’t change my view.
Amazon’s stock closed at $200 a share on July 5, giving it a market capitalization of $2.2 trillion, making it the Dow’s best-performing stock over the past six months.
As you may remember, Walgreens Boots Alliance (New York Stock Exchange:WBA) was released in February, delighting bulls on Wall Street.
But there’s another lesson from Prime Day that applies to the market as a whole.
Consumers are what drive the economy, so if they start catching colds as Prime Day approaches, you might want to get a grip on all your stock holdings.
As of the time of writing, Dana Blankenhorn holds long positions in AAPL and AMZN. Opinions expressed in this article are solely those of the author and are copyright InvestorPlace.com. Publication Guidelines.
On the date of publication, the editor in charge did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
