Wall Street is back in love with Amazon despite Trump threats (AMZN)
Mario Tama/Getty Images
If you had to pick one tech company most at risk under Trump's presidency, it would have to be Amazon.
Donald Trump and Amazon CEO Jeff Bezos constantly butted against each other throughout the campaign, with Trump once warning that the e-commerce company would face "problems" if he became the president.
So it's no surprise that Amazon's stock dropped by as much as 9% post-election, despite Bezos offering an olive branch shortly after Trump's win.
But over the past week, Amazon has quickly crawled back, and now it's regained all the post-election losses, showing Wall Street's renewed confidence in the $350 billion company.
"Initially there was this knee-jerk reaction around Trump’s presidency and his fairly negative comments around Amazon and Bezos while he was campaigning," Mizuho's analyst Neil Doshi told Business Insider. "But I think the market has settled down and gained a little more confidence and sensibility around all of this."
False accusations
Part of it has to do with the broader market rally, which is pushing all the major indexes to record-highs on hopes of Trump's market-friendly policies benefiting most companies.
But Doshi says it's also because of investors coming to realize that Trump's threats on Amazon are "grossly false."
Trump has accused Bezos of using the Washington Post as a way to lower Amazon's taxes, while arguing that its online shopping site is violating anti-trust laws. Doshi says neither claim makes much sense, as the Washington Post is owned by Bezos, not Amazon, and Amazon's retail market share is just about 15%, not enough to call a monopoly.
On top of that, some of the recent news around Prime Video and the upcoming AWS re:Invent conference, as well as strong e-commerce forecasts for this year's holiday season, could all be driving the snap back, he said.
Still, there remains some risks. Trump hasn't been entirely clear on where he's going with some of his trade and immigration policies, and has already flip flopped on some of his promises. Plus, Trump has had a contentious relationship with Silicon Valley in general, unlike the Obama administration who was very cozy with the tech industry.
"There's going to be a bit of an overhang for technology in general because it’s really unclear how [Trump] is thinking," Doshi said.
NOW WATCH: A mysterious cloud moving 700,000 mph is going to collide with our galaxy — here's what will happen