In a strange turn of events, Amazon (NASDAQ:AMZN) slipped today, losing just over 3% in Tuesday morning’s trading session. This is despite some new word out of D.A. Davidson that suggests Amazon has not only value from its e-commerce, but also in its growing stake as an artificial intelligence powerhouse.
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D.A. Davidson analyst Tom Forte left his price target of $150 in place, noting that Amazon’s move to purchase Anthropic gave it a lot of extra firepower in the nascent AI market. With Anthropic in hand, Amazon is on much better footing to compete with Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT), despite the substantial early mover advantage that those two already enjoy. Further, Forte looks for at least “incremental” growth in Amazon Web Services, but if its AI efforts can catch on, the growth would likely be significantly higher than just “incremental.”
Yet, all isn’t well for Amazon. Reports note that after the massive Teamster win at UPS (NYSE:UPS), Amazon’s delivery drivers are starting to look at their own lot with concern. Amazon’s making some moves to potentially head off a mass exodus—including help with child care and education—but it may not be enough. And without delivery drivers, much of Amazon’s business model collapses. Further, Amazon has a second problem in a softening economy. Nearly half of all respondents in a Celigo study expected to spend less than $1,000 for the holiday.
Is Amazon a Buy or a Sell Right Now?
Yet, analysts remain optimistic. With 39 Buy ratings and one Hold, Amazon stock is considered a Strong Buy by analyst consensus. Further, with an average price target of $176.18, Amazon stock offers investors 38.69% upside potential.
