While the Trump administration has been focusing efforts on deregulating many industries, there’s one industry that could see a significant uptick in regulations. Amazon.com, Inc. (NASDAQ:AMZN) is the latest FAANG name to fall victim to the R word, which has also routed Facebook Inc (NASDAQ:FB) recently, especially since the data debacle involving Cambridge Analytica. Amazon stock became the biggest loser of the FAANG group on Wednesday as the company shed more than $50 billion in market capitalization.
However, analysts are also convinced that the pullback in Amazon stock presents a buying opportunity, just as they’ve been arguing with Facebook as well.
Trump said to be “obsessed” with Amazon
Axios reported today that its sources say that President Trump is “obsessed with Amazon.” The media outlet’s sources reportedly said he’s been discussing changing the online retailer’s tax treatment due to concerns about small retailers going under because they can’t compete. They also reportedly said that he’s been wondering if officials could pursue Amazon through antitrust laws, but he doesn’t current have any plans about how to do it.
Reuters was also able to independently confirm that Trump has been complaining privately about Amazon because he’s concerned it has become too strong. However, the media outlet’s source reportedly linked the president’s complaints with his hatred of The Washington Post, which is owned by Amazon CEO Jeff Bezos.
Even though it doesn’t sound like there’s any imminent threat to Amazon due to Trump’s distaste, Wall Street has been on edge already due to concerns about regulation of Facebook. According to Axios, Vice President Pence seems much more interested in regulating Facebook and Google, as does the rest of Capitol Hill.
Don’t worry so much about Amazon stock: analysts
As Amazon stock took the plunge today, analysts have been quick to come to the company’s rescue in an attempt to reassure investors. Amazon stock plunged by more than 7% in intraday trading on Wednesday, falling as low as $1,386.17 before bouncing after analysts rushed to offer their support. At one point, the online retailer had lost $53 billion in value after its stock plunged into correction territory, until the Street came to its rescue.
In a note today, GBH Insights analyst Daniel Ives drew a direct line between the Amazon stock decline and Facebook’s data woes, saying that tech investors don’t want to hear any more bad news pertaining to regulation of their favorite names. He also said that regulation jitters have generally routed the stock multiples of the FANG names, but he sees little risk of any real regulatory danger to Amazon. As a result, he remains a buyer of Amazon stock on today’s weakness due to the Trump report and maintains his Highly Attractive rating and $1,850 price target on it.
Stifel analyst Scott Devitt also maintains a high view of Amazon stock, as he noted that Trump’s views aren’t anything new. Even if there were some sort of sales tax collection implemented for third-party sellers, he sees little impact on the growth in the company’s gross merchandise volume. He also believes that Amazon has built up strong trust with consumers, which he feels will continue to help it. Like Ives, Devitt also remains a buyer of Amazon stock on today’s weakness.
At the time of this writing, Amazon stock is down more than 4% at $1,435.15 per share.