This year's holiday hiring spree by e-commerce giant Amazon.com bodes well for AMZN stock, says a Bank of America analyst. But Amazon stock has pulled back from a 52-week high set on Sept. 14.
Amazon said Tuesday that it plans to hire 250,000 full-time, part-time and seasonal fulfillment-center and transportation employees in the U.S. ahead of the holiday season. That's 67% more than the 150,000 it hired in 2022.
"Amazon's hiring levels relative to other retailers suggest the company anticipates strong holiday season revenue trends," said BofA analyst Justin Post. He holds a buy rating on AMZN stock.
On the stock market today, Amazon stock dropped 1.7% to close at 135.29.
AMZN Stock Up 61% In 2023
At Morgan Stanley, analyst Brian Nowak noted in a report that the 250,000 jobs marks Amazon's biggest hiring spree since 2019. That year, it added 200,000 holiday jobs.
"We see Amazon's 250,000 seasonal hires (25% above 2019 levels) as a bullish leading indicator for expected continued retail share gains," Nowak said in the report.
Amazon had 1.46 million employees as of June 30, including its cloud computing business, AWS.
At BofA, Post estimated that the hiring spree will add $1 billion in labor costs in the December quarter vs. 2022. "While Amazon's largest ever annual investment in U.S. hourly pay could be a headwind to margins, we expect Q4 gross profit to be up $12 billion year-over-year, more than enough to absorb the incremental labor costs if Amazon can effectively manage sales and marketing expenses," Post said.
AMZN stock hit a 52-week intraday high of 145.86 on Sept. 14 and closed at 144.72 that day. Amazon stock now trades 5.8% below an entry point of 143.63 from a flat base.
AMZN stock has gained over 61% this year so far, outpacing the Nasdaq's 28.7% increase.
Shares popped after the company reported better-than-expected second-quarter earnings and sales on Aug. 3.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
