A Donald Trump presidency might bring bad news for Amazon investors.
After targeting Amazon on antitrust issues and suggesting that Amazon-owned Washington Post has a team of 20 reporters digging dirt on his campaign, a Trump presidency might weaken Amazon's force that has come with its years of dominance in the U.S. market.
Even though Amazon technically has a sturdy defense to all of Trump's accusations, when the political winds change on The Hill, it is not uncommon to see old legal precedents falter, suggests a MarketWatch column.
"If Trump becomes president, there are significant risks to Amazon. Such risks are not discounted in the price of this stock at this time. In other words, investors right now are not being compensated for Trump risk," it reads.
Politics aside, even though Amazon currently seems to be biting into the profits of big-box retailers, like Target, Macy's, Bed Bath & Beyond and Walmart, MarketWatch suggests that Amazon seems to be riding on overly bullish analysts' estimates, which are giving its stock an upward push.
The bright picture that Amazon's increasing market share in the apparel and clothing industry is painting right now might fade off, according to recent research that MarketWatch cited.
"Expensive stocks often become more expensive; therefore, Amazon being expensive is not a good reason not to buy this stock. However, the good reasons to not buy it are that analysts are overly bullish, and investors are not being compensated for the risk involved in this stock," the column says. "Conservative investors may want to stay clear of this stock."