What's Next for the Amazon Stock Price in 2016

The Amazon stock price was down over 0.5% in early afternoon trading activity on Cyber Monday, one of the most important days for Amazon's sales.

amazon stock priceAccording to ABC Action News Philadelphia, an Amazon.com Inc. (Nasdaq: AMZN) spokesman stated that Cyber Monday is Amazon's busiest day of the year. On Cyber Monday 2014, Amazon customers ordered 500 items per second.

According to Adobe, 2014 Cyber Monday sales totaled $2.65 billion in the United States - that's up 16% from sales in 2013. Investors will keep a close eye on the Cyber Monday sales growth the company reports this year as well.

While Cyber Monday is the biggest day of the year for Amazon, the Amazon stock price has historically fallen on the day.

Since 2013, the Amazon stock price has closed slightly down from its opening price on Cyber Monday. In 2014, the Amazon stock price opened at $338.12 on Cyber Monday and closed at $326.00. In 2013, the Amazon stock price opened at $399 and closed at $392.30.

Part of the reason for the Amazon stock price drop is selling pressure from institutional investors. You see, November and December are not months in which institutions add new positons. Hedge fund managers typically try to sell off losses to make portfolios appear more attractive in the new year. This practice also helps them take advantage of tax write-offs.

But any dip in the Amazon stock price today would create an excellent buying opportunity...

Any short-term setbacks should not overshadow the dominance of Amazon as a leading online retailer.

Despite today's early dip, AMZN stock is up 115% year to date, and we expect the Amazon stock price to continue its meteoric rise...

The Amazon Stock Price Will Continue to Rise in 2016

A strong performance in Q3 2015 is one of the primary reasons the Amazon stock price has soared in 2015.

Amazon reported earnings per share (EPS) of $0.17 on revenue of $25.4 billion. Wall Street expected Amazon to report a loss of $0.13 per share on revenue of $24.9 billion.

You see, Amazon's strong earnings are due to the company's massive scalability.

For Q3, Amazon posted net sales of $2.1 billion in its enterprise cloud service, Amazon Web Services (AWS). Forbes projects the cloud-computing market to grow to $67 billion in 2018, and cloud applications will account for 90% of worldwide mobile traffic by 2019.

And cloud computing is just one emerging industry that Amazon has a strong foothold in.

According to research company Statista, 19 million tablets were shipped worldwide in 2010. By 2018, Statista projects that 286 million tablets will be shipped. With prices as low as $49.99 for the Kindle Fire, Amazon has created an affordable option in a high-demand sector.

The real power in the Fire tablet, however, is that Amazon created a perfect vehicle for customers to purchase its other products. Amazon offers music, streaming movies and television shows, books, apps, and games. The tablet is merely a doorway for new customers to purchase additional products from Amazon.

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The company also has surging numbers in its delivery service Prime. According to The New York Times, paid membership in Prime rose 53% in 2014. Amazon does not release hard data on the actual amount of members, but analysts projected the service had 40 million paying users as of last January.

The AMZN stock price closed at $338.64 on Nov. 28, 2014. In the last 12 months, it has climbed 99.6% to today's opening price of $675.90.

The Bottom Line: The Amazon stock price may see a temporary pullback on Cyber Monday despite posting enormous sales totals. But with its strong fundamentals and growing reach in high-demand sectors, ignore the small setbacks. Amazon stock is a long-term play with no signs of slowing down.

Jack Delaney is an associate editor for Money Morning. You can follow him on Twitter and follow Money Morning on Facebook.

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