Costco Just Gave Amazon a Crystal Ball for What to Expect on Prime Day (October 8-9)

October 8th and 9th—those are the days your wife or girlfriend has more reminders set for than her daily skincare routine. 

If you’re not counting down to Amazon Prime Day, trust me, she is. And if you’re thinking this is just another sale, one analyst is so hyped up on Amazon-flavored Kool-Aid, they just raised their target price. We’re talking about stock prices here (just so we’re clear).

Amazon Prime Day isn’t about clearing out old stock anymore, now it’s a serious revenue driver. With inflation showing signs of easing, consumers are starting to spend again, particularly on non-food items like electronics, home goods, and beauty products. These are exactly the kinds of categories that have made Prime Day a shopping juggernaut.

Costco’s recent sales report gives us a glimpse into what Amazon might expect. In August, Costco’s U.S. sales jumped 3.8%, but get this—it wasn’t from people loading up on food or essentials. Instead, shoppers are starting to splurge on the fun stuff again, like electronics and home goods. It’s a sign that people are feeling a bit more confident about spending on things they don’t need but definitely want. This bodes well for Amazon as it gears up to capitalize on similar trends during its October Prime Day event.

According to Adobe, U.S. online sales are expected to hit $240.8 billion during the 2024 holiday season, up 8.4% from the previous year. Amazon, as the dominant e-commerce platform, is in a prime position to benefit from this surge (pun intended).

Now, let’s get to what you really care about: stock prices. Truist analyst Youssef Squali must have been having a really good day because he just raised Amazon’s price target from $230 to $265. That’s right, folks, $265. Squali is betting big on Amazon’s continued dominance in North America, advertising growth, and AWS (Amazon Web Services), which, by the way, is growing at 19% year-over-year. Sure, it’s lagging behind Microsoft and Google, but hey, nobody’s perfect.

What’s driving this bullishness? Well, aside from Prime Day’s looming cash cow status, Amazon is also investing heavily in artificial intelligence (who isn’t?), logistics, and Project Kuiper—because why not throw in some space stuff for Bezos, right? These moves, combined with stronger operating margins, make Amazon Truist’s top mega-cap pick.

Not to be outdone, Evercore ISI analyst Mark Mahaney also raised his price target, albeit a tad more conservatively to $240. He’s bullish on Prime Video, predicting that by 2025, it’ll be generating anywhere from $3 billion to $5.9 billion in revenue.

Of course, it wouldn’t be Amazon without a little employee drama. CEO Andy Jassy recently dropped the "everyone back to the office" memo, requiring employees to physically show up at least three days a week. Naturally, this caused a bit of a stir, with 73% of Amazon workers saying, “Nah, we’re good” and considering quitting. Whether or not that’ll impact the stock is TBD, but so far, Wall Street doesn’t seem too fazed. Maybe they’re just thrilled to avoid paying severance?

Meanwhile, Amazon is up over 22% year-to-date, barely outpacing the S&P 500’s 21.5% gain. Despite a nearly 9% crash in August after missing sales expectations, Amazon quickly recovered. Their Q2 revenue of $147.98 billion fell slightly short of the target, but they made up for it by absolutely crushing earnings per share—$1.26 versus the expected $1.03. So yeah, they tripped, but landed it like a pro.

With Prime Day fast approaching, the real question is whether Amazon’s still got momentum or if it’s hitting a wall. Analysts like Truist’s Youssef Squali thinks it’s gonna be a money machine. But we’ll find out for sure starting on October 8th.

P.S. 54% short interest, and a 648.5% borrow fee?! Once this catalyst hits this little known stock… we could be going to the moon! Of course, we’ll be dropping the ticker symbol sometime soon… so click here ASAP to upgrade to premium so you don’t miss out on this seismic opportunity.

Stock.News has positions in Amazon, Microsoft, and Google.