While e-commerce powerhouse Amazon (NASDAQ:AMZN) may not have made many friends with its new ad tier on Prime Video, it might have won some of them back with its latest Diamond Sports deal. The move was sufficient to send Amazon shares up modestly in Thursday morning’s trading.
Diamond Sports’ recent bankruptcy came as a huge potential opportunity for someone with deeper pockets, as Diamond was the biggest name in regional sports broadcasting around. Amazon stepped in and made arrangements with Diamond’s creditors, effectively taking over Diamond’s operations and putting those local sports channels through Amazon Prime Video. That gives Prime Video viewers access to over 40 different major sports teams.
A Major Opportunity
Finding a way to provide sports in streaming content has long been the Holy Grail for streaming media. Viewers want to watch sports; that’s what kept a lot of them from cutting the cable and moving to streaming alternatives; they just couldn’t find what they wanted anywhere else. But with Amazon stepping in to take over Diamond, it’s got the content viewers wanted to see.
In fact, Amazon will now have access to a lot of sports content; Diamond not only has 11 teams in Major League Baseball, but also 11 teams in the National Hockey League and 15 in the NBA. That is a lot of sports content and will make Amazon Prime Video a major destination for sports viewership. Ad-tier or not, Prime Video just gave itself a major selling point in the ongoing streaming wars.
Is Amazon a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 41 Buys assigned in the past three months, as indicated by the graphic below. After a 63.68% rally in its share price over the past year, the average AMZN price target of $184.66 per share implies 20.21% upside potential.
