Who is actually selling Amazon when all analysts advise buying?
Amazon delivered its best quarter in five years, analysts predict a price a third higher, and yet it is the only stock among the Big Seven that keeps falling. The answer lies not in the income statement but in the market that most equity investors never look at.
Key points
Amazon delivered its best quarter in five years and has lost 13% since then without a single piece of bad news
Almost sixty analysts are targeting $329.54 and not one of them says sell
Of the reported profit of $62.6 billion, Amazon never saw $53.4 billion in its account
Free cash flow fell over the year from plus $18.2 billion to minus $7.6 billion
When an analyst asked where the money for more data centers would come from, Jassy had nothing to say
The record that Amazon is missing
The equal-weight Big Seven ETF MAGS last week surpassed its May record and the S&P 500 is holding just below all-time highs around 7,700 points. Nvidia has added about 21% this year, Apple 24%. And Amazon $AMZN? On Monday, September 28, it closed at $246.15, about 13% below its record close of $284.02 on August 3 and 14% below its intraday high of $287.20. In September alone it lost over 5%, and for the year it is up only 8% versus 13% for the whole index.
More interesting than the decline itself is who is behind it. According to Yahoo Finance, the consensus of almost sixty analysts targets $329.54, or 34% above the current price. The highest target is $405. There is not a single sell recommendation.
That is a strange combination. When everyone who professionally follows the company says the stock is a third undervalued, yet it keeps falling for two months, someone must be on the other side of the trade. And that someone is clearly not following what equity analysts write. Who they are and what they look at is a question every investor who holds Amazon as a "safe bet" in their portfolio should ask.