Amazon stock (AMZN) has been stuck in the penalty box for most of 2021 as investors see what new CEO Andy Jassy has up its sleeves and business growth is slowing after a big 2020 as people shopped more online during the height of the pandemic.
Veteran technical analyst Mark Mahaney of EvercoreISI believes Amazon stock still has a ways to go before it begins a sustained climb.
“Amazon stocks are waiting for a release,” Mahaney told Yahoo Finance Live. “Amazon is entering another cycle of investment, especially when it comes to retail infrastructure and distribution. They are really trying to lock in day delivery, and what I call super same day delivery. If they can show that they can get a return from it, which I think will and will show accelerated spending on the part of clients, then investors will look beyond the pressure on short-term margins and the market. stock will always increase. This is what we are waiting for, and we will have this release in the next six to twelve months. “
The pressures on Amazon stocks as investors assess the results of its investment cycle are pretty obvious.
Amazon shares have only risen 5% year-to-date, badly lagging behind double-digit earnings for the Dow Jones Industrial Average, the Nasdaq Composite and the S&P 500.
The stock is also the worst member of the closely watched FAANG [Facebook, Amazon, Apple, Netflix, Google] complex. Top performer Google has gained 62% year-to-date as investors were impressed with the growth of YouTube and cloud services.
Zooming out on a Yahoo Finance Plus chart, Amazon’s stock has practically stagnated since early July 2020. From March 2020 (peak of pandemic hysteria and trough for the broader stock market) to July 2020, the stock had appreciated by around 68 % as traders braced for a major acceleration in growth.