Amazon Prime Big Deal Days Begin as Consumer Confidence Hits 2014 Low
Amazon launched its Prime Big Deal Days on October 6 amid a backdrop of declining consumer confidence, which has dropped to its lowest level since 2014. According to Reuters, the Conference Board’s index fell to 81.9 in September. The Consumer Discretionary Select Sector SPDR Fund (XLY), of which Amazon is the largest holding, slipped 0.47% in the week ending October 2. This two-day sale event serves as the first major holiday season indicator to gauge whether consumer sentiment is impacting spending.
Amazon’s second-quarter results, which predate the recent drop in consumer confidence, showed a 17% growth in worldwide paid units. Key growth areas include perishables and items under $10, categories that tend to be more resilient during economic downturns. CEO Andy Jassy noted that monthly active perishables customers grew over 50% since the start of the year, and Amazon Haul listed over 6 million U.S. items under $10 as of July 30. CFO Brian Olsavsky highlighted that Amazon’s prices are on average 14% less than other retailers, according to third-party research firm Profitero.
Looking ahead, Amazon’s third-quarter revenue guidance of $197 billion to $202 billion implies roughly 9% to 12% growth over the previous year’s $180.2 billion. However, excluding Prime Day from both 2025 and 2026, third-quarter growth would be nearly 400 basis points higher, suggesting potential near-term risks if consumer spending weakens. The stock currently trades at 20.22x trailing earnings, down from 32.62x at the end of 2025, and investment gains from Anthropic have significantly boosted GAAP net income.
Analysts project Amazon’s stock could reach a mid-case target price of ~$600 by 2030, representing a potential total return of ~139% and an annualized IRR of ~23% per year. Revenue is expected to rise from $716.9 billion in 2025 to around $1.38 trillion in 2030, with normalized net margin widening from 10.8% to around 16%. Key risks include a potential consumer pullback during the cash-flow trough and rising transportation costs due to fuel expenses.