As of this writing, the Reader's Choice Best Stock for 2019, Amazon, is in third place, but it could easily end the quarter in the fourth or even second spot. With a year-to-date gain of 28%, AMZN stock is just 1% behind second place Adobe (NASDAQ: ADBE ). Teladoc (NYSE: TDOC ) was in striking distance of AMZN as recently as yesterday, but has since fallen to fifth place.
To put it simply: the race - for second to fifth places at least - is tight, and the market is volatile. Especially for tech stocks, as the recent Nasdaqswings have shown .
A gain of 28% YTD at the end of the second quarter is nothing to scoff at, especially since it's thoroughly beating the S&P 500's 16% gain in that time. But it is a slowdown given that AMZN stock finished Q1 up 19% . Luckily for Amazon, there are a number of catalysts that may help it along in Q3.
AMZN Stock Looking Ahead to Q3
Just yesterday, Amazon released the date - now dates - for Amazon Prime Day. This year the annual shopping event will run from July 15-16 and hopes to attract new Prime Members. Last week, RBC Capital estimated that 59% of households are now Prime Members, so you have to wonder how much more room there is to grow, but you also have to admire that market share. If a significant portion of these households are shopping on Prime Day, the revenues for AMZN stock could be huge.
On Prime Day 2018, even with some site outages , Amazon sold over 100 million products with sales exceeding $1 billion in 36 hours. This year we have 48 hours. And for even more profits, many of the best deals on Prime Day will be for Amazon's own tech.
In Q2 Amazon announced forays into SmartTVs and supplies for beauty professionals . One the other hand, the company shut down Amazon Restaurants , its food delivery service. Within a day, however, it had announced a plan to launch a new credit card for people who don't have access to other types of credit.
That's the key to Amazon: it's always chasing the next big thing, and equally important, the company knows when to bow out.
One-Day Shipping Is a Game Changer for AMZN Stock
Perhaps the biggest announcement of Q2? Amazon Prime's free shipping is going from two days to one day . This move will cost the company $800 million, but I think it will more than pay for itself.
In recent quarters, retailers like Walmart (NYSE: WMT ) have been leveraging their network's brick-and-mortar locations to undercut AMZN's once-novel two-day delivery. With one-day shipping, Amazon's convenience factor is upped even higher. This is bad for Walmart and Target (NYSE: TGT ), but it could also help AMZN take even more customers from smaller brick-and-mortar retailers. After all, if you can get something you need by tomorrow without leaving your house, the appeal of going out to get it today drops even further.
Whether this is good or bad overall is up for debate , but it's undeniably a win for AMZN stock. Expect the initial cost to hit Amazon's profits in the Q2 report, but don't panic. The rollout has already started .
One potential headwind for AMZN stock heading into Q3 is government oversight. Antitrust regulators have signaled that the FTC has set its sights on the e-commerce giant while the Justice Department is interested in Alphabet (NASDAQ: GOOGL , NASDAQ: GOOG ).
The Bottom Line for AMZN Stock
How will this all shake out over the rest of the year? That remains to be seen. But one advantage AMZN stock has over the rest of its Best Stocks competitors is the ability to move the market. As the second largest company by market cap, if Amazon were to take a nose dive, the rest of the market would likely go with it.
Of course, the other side of that coin is that with a market cap of $932 billion, AMZN stock is extremely unlikely to see any 100%+ gains from here.
As of this writing, Regina Borsellino held no positions in the aforementioned securities.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of NASDAQ, Inc.