[Overseas Stocks Spotlight] "Amazon, Still a Leading Player in the Untact Era"

Re-entering Growth Cycle with 1-Day Delivery and Accelerated E-commerce Expansion

[Asia Economy Reporter Eunmo Koo] Amazon (Amazon·AMZN US), which has shown continuous stock price increases since the beginning of the year, is expected to maintain its stock price momentum as a beneficiary of the untact (contactless) trend. Amid the ongoing COVID-19 pandemic, the acceleration of structural growth in one-day delivery and e-commerce is leading Amazon to re-enter a growth cycle.

On the 21st, Han Ju-gi, a researcher at Samsung Securities, stated in a report, “As sector rotation between untact beneficiaries and traditional industries is underway, concerns over the resurgence of COVID-19 have been spreading recently,” and “In the short term, market attention is likely to shift back to untact beneficiary companies.” Han explained, “Considering that Amazon has the highest exposure to industries that genuinely benefit from the untact environment such as e-commerce, cloud, and video streaming, it is likely to be re-highlighted as a representative untact beneficiary.”

With strong e-commerce demand continuing from April to June this year, expectations for second-quarter earnings are also expanding. Han said, “We confirmed a surge in e-commerce demand in April through the first-quarter results of offline retailers, and through Costco’s May sales and eBay’s upward guidance, we confirmed that e-commerce demand continued through May,” adding, “Considering Amazon’s summer sales events and the ongoing COVID-19 situation in June, sales are expected to remain solid.”

Meanwhile, clothing sales in U.S. retail increased by 188% in May compared to April. Han evaluated this as “a factor leading to an overall increase in average selling prices (ASP) and profitability improvement for retailers.” He also explained that concerns about increased COVID-19-related costs mentioned during the first-quarter earnings announcement have eased due to normalization of labor costs (in June).

It is analyzed that Amazon is re-entering a growth cycle due to the acceleration of structural growth in one-day delivery and e-commerce. Han said, “Even excluding short-term sentiment improvements and earnings expectations, the full-scale launch of Amazon’s one-day delivery combined with the acceleration of structural growth in e-commerce due to COVID-19 is leading Amazon to re-enter a growth cycle,” and “Amazon’s dominance in the e-commerce market and expansion of the Amazon Prime ecosystem are expected, which could lead to valuation expansion.”

This content was produced with the assistance of AI translation services.