Amazon, Inc. (AMZN) Stock: Price is Up as Amazon Makes Surprise TikTok Bid

Amazon, Inc. (AMZN) Stock: Price is Up as Amazon Makes Surprise TikTok Bid

TLDR:

• Amazon has made a last-minute bid to acquire TikTok’s US operations before a Saturday deadline
• Market experts are divided on Amazon’s outlook, with some raising “alarm bells” while others see it as “undervalued”
• AWS generates $100 billion in annual revenue and is growing at 20% yearly
• Amazon’s recent Spring Sale generated significant consumer interest after e-commerce struggles
• Jeff Bezos has been working to improve relations with President Trump after previous tensions

Amazon has made a surprise last-minute bid to purchase TikTok’s US business, just days before the Saturday deadline that would see the app banned in America if not sold by its Chinese owner ByteDance.

The retail giant submitted its offer through a letter to Vice President JD Vance and Commerce Secretary Howard Lutnick, according to the New York Times.

This unexpected move comes as financial experts publicly clash over Amazon’s market outlook, with some raising concerns while others see buying opportunities.

The Trump administration was reportedly not taking Amazon’s bid seriously. However, the attempt represents a major shift in relations between Jeff Bezos and Donald Trump.

Bezos Courts Trump

The Amazon founder and executive chairman has made several efforts to improve his relationship with President Trump in recent months.

Trump frequently criticized Bezos during his first term, partly due to the billionaire’s ownership of the Washington Post.

Since then, Bezos has prevented the Washington Post from endorsing a candidate in the 2024 election. Amazon also signed a $40 million deal to license an upcoming documentary about Melania Trump.

Amazon donated $1 million to Trump’s inauguration fund, and Bezos attended the event with his fiancée Lauren Sanchez.

Bezos’ space company Blue Origin is also seeking government contracts for space exploration projects.

E-Commerce Strategy

The potential TikTok acquisition could help Amazon gain ground in social shopping, an increasingly important retail channel.

TikTok Shop allows users to purchase items promoted in their video feeds, bypassing traditional e-commerce sites.

Jasmine Enberg of eMarketer notes that nearly half of TikTok’s US users make purchases through the app. “Amazon’s reported bid is proof of TikTok’s prowess in e-commerce and the changing nature of how consumers shop and buy,” she said.

The acquisition could strengthen Amazon’s position with younger shoppers who start and complete purchases on social platforms rather than dedicated shopping websites.

It might also boost Amazon’s growing advertising business, which charges retailers for prominent placement in search results.

Mixed Market Signals

Market experts are divided on Amazon’s current position and future prospects.

Ron Westfall, Research Director of The Futurum Group, sees “alarm bells” for Amazon, citing softening consumer spending reported by both Walmart and Delta.

Westfall also pointed to Amazon’s first-quarter fulfillment guidance coming in below expectations. He warned that increased US tariffs on China could hurt Amazon, as 25% of its products come from China.

He also expressed concern that economic caution could harm Amazon’s cloud business.

In contrast, Chris McMahon, CEO of Aquinas Wealth, believes Amazon is “undervalued” due to its cloud business strength. He has a $280 price target on the stock.

McMahon highlighted that AWS generates $100 billion in annual revenue and grows at 20% annually. He also noted that Amazon’s retail business is outperforming competitors like Walmart and Costco.

Megan Brantley, VP of Research at LikeFolio, offers a middle view. After recent stock pullbacks, she believes Amazon shares “are starting to look appealing” and provide a good “buying opportunity.”

Brantley reported that Amazon’s Spring Sale, which ended March 31, attracted substantial consumer interest. This was important as the e-commerce unit had been “struggling to gain traction” previously.

She characterized Amazon’s e-commerce business as “resilient,” partly due to its Prime program, which encourages customer loyalty.

However, she noted some loss of momentum as middle and lower-income consumers reduce spending.

Amazon’s strengths include same-day delivery in many US metropolitan areas, an improved search engine, and less political controversy than competitors like Target.

“Amazon has a high sentiment rating, its execution has improved, and it’s a best-of-breed name,” Brantley concluded.

As the TikTok deadline approaches and market assessments continue to vary, Amazon finds itself at an interesting crossroads between political reconciliation, social commerce expansion, and addressing mixed economic signals.

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