Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Have Amazon shares peaked? Some industry experts think so

The Amazon share price has increased by more than 80% this year. Thanks to a record-breaking Black Friday, the company is set to pay out a £374 million Christmas bonus.

Black Friday 2020 is set to break all previous records and, in turn, give Amazon shares a boost. By that measure, business is booming. However, Scottish Mortgage (SMT) fund managers James Anderson and Tom Slater recently sold 2.1% of their holding in the company. The long-term investors made their move just days after Jeff Bezos cashed in one million of his own shares.

The company owners, Anderson and Slater, have ridden the Amazon share price wave for more than 16 years. Although their fund still has a 7.9% holding in the company, they believe significant long-term gains will be hard to come by in the future.

'Whilst we have huge respect for Amazon’s vision and ability to execute, its starting capitalisation of over $1.5 trillion makes the path to large future returns more challenging,' the fund managers said during a recent half-year report.

Scottish Mortgage implies Amazon share price has peaked

This isn’t the first time the pair have sold shares in Amazon. However, it is the first time they’ve done so on the basis that they may have levelled out. It’s true that Amazon shares have plateaued over the last eight weeks. After starting the year at $1,898, the Amazon share price peaked in September at $3,550.

The subsequent downswing has been far from severe - trading opened at $3,195 on 30 November. However, Anderson and Slater believe the potential for another significant spike is low. The data, however, suggests that eCommerce is stronger than ever. Live Adobe Analytics data predicts that consumer spending will reach record levels this year.

Tracking sales at 80 of the top 100 US retailers, Adobe’s forecast shows spending between Black Friday and Cyber Monday will reach $189 billion. That’s a 32% increase on the $142.2 billion spent in 2019. Prior to Black Friday, analysts at Truist estimated that 42 cents of every dollar spent would go to Amazon. That fact may have contributed to the five-day increase in Amazon shares. In the days prior to Black Friday, the Amazon share price jumped from $3,117 to $3,214.

Amazon share price could rise in a post-COVID world

NYU marketing professor Scott Galloway believes Amazon was 'invented for the pandemic'. In contrast to Anderson and Slater, he believes the company will go from strength to strength in a 'post-corona' world. The recent launch of Amazon Pharmacy certainly supports this hypothesis. Prime customers can now create 'secure' medical profiles and have medication delivered to their door as well as discounts on prescription drugs.

The company has always been one for diversification and now it’s tapped into the post-COVID health concerns of millions. What’s more, record spending over Thanksgiving suggests that online retail is far from passé. The Amazon share price may have hit an annual high in September, but that may have raised the baseline. Indeed, it will be interesting to see whether Scottish Mortgage made the right call or whether Galloway’s post-corona prediction comes to pass.

Is the time right to trade Amazon shares?

For just a small initial deposit, you can speculate on the Amazon share price with spread bets or CFDs. Spread bets are completely tax-free, while CFDs are free from stamp duty.1 You can also buy and take ownership of US shares commission-free with us.2

Whether you trade or invest, you’ll get access to pre-market and after-hours trading on 70 US stocks.

Open an account to start trading or investing in US shares.

1 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.

2 Deal three times or more in the previous month to qualify for our best rate.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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