Amazon.com, Inc. (Nasdaq: AMZN) stock fell more than 4 percent Wednesday after Axiom reported that President Donald Trump is still holding a grudge against Amazon and CEO Jeff Bezos.
Trump has reportedly been exploring ways to go after Amazon with higher taxes or potentially target the company on antitrust grounds, but analysts are downplaying the impact that Trump’s personal vendetta will have on the stock in the long term.
Trump has publicly criticized Amazon repeatedly in the past.
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“Amazon is doing great damage to tax paying retailers,” Trump tweeted last August. “Towns, cities and states throughout the U.S. are being hurt — many jobs being lost!”
Trump has also criticized the Washington Post, which is owned by Bezos.
Axios reportedly talked to five unnamed sources that have discussed Amazon with Trump and say he is still looking for ways to target the company from Washington.
“He’s obsessed with Amazon,” once source said. “Obsessed.”
Fortunately for Amazon investors, a White House official told Reuters that there is currently no legislation in the works regarding Amazon. However, the official said the administration is always open to discussions.
GBH Insights head of technology research Daniel Ives says its very unlikely that Trump’s beef with Amazon will end up having a long-term impact on the stock.
“Today’s news adds gasoline to the fire that Amazon could see more regulation ahead, and the stock is seeing significant pressure accordingly,” Ives says. “While its now a hand-holding time for Amazon given this new regulatory potential threat, we believe the reality of these worries altering the company’s business model and future tax structure are low, and we would be buyers of the name on weakness.”
Online advertising has been a major concern for investors of Facebook ( FB) and Alphabet ( GOOG, GOOGL) in the wake of the recent Cambridge Analytica Facebook scandal, but Bank of America analyst Justin Post still says advertising as a key long-term growth driver for Amazon.
[See: 7 of the Best Tech Stocks to Buy for 2018.]
“Using Google advertising and Facebook as comps, we assume Amazon’s advertising margins could be around 40 percent in 2018, and the business could generate $2.7 billion in income in ’18,” Post says.
GBH Insights has a “highly attractive” rating and $1,850 price target for Amazon. Bank of America has a “buy” rating and $1,650 target for AMZN stock.
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Amazon.com, Inc. (AMZN) Investors Shouldn’t Worry About Trump originally appeared on usnews.com
