Shares in Amazon (AMZN) stock are down on Tuesday after a report revealed the e-commerce giant’s Prime service saw a recent reduction in new subscriptions. During its latest Prime Week event, Amazon secured 5.4 million new Prime members in the U.S. during the three-week lead-up and the four-day sales event from July 8 to July 11. However, according to Reuters, this was approximately 116,000 fewer than a year earlier and about 106,000 below Amazon’s internal target, representing a roughly 2% decline in both measures.
As a result of the report, AMZN stock saw a 1.9% dip on Tuesday continuing a slight dip over the last five days as well. Prime is a big player in Amazon’s total revenue, so the dip was a concerncing one for investors in AMZN shares. Depite the company exceeding its goal during the four-day Prime Day event itself, with 1.6 million new sign-ups, the run-up period lagged significantly. Indeed, in the three weeks before the sale, U.S. Prime memberships are said to have totaled 3.9 million, a 5% shortfall compared with 2024.
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Additionally, Amazon faces intensifying competition from Walmart’s subscription service, while also navigating the impact of U.S. tariffs on consumer spending. If Prime subscriptions are dropping, that also means that WMT could be getting a leg up, closing the gap between the two e-commerce giants. The two stocks often inverse eachother, meaning that if WMT climbs, AMZN could see a further slump.
Amazon stock is currently trading near the top of its 52-week range and above its 200-day simple moving average. Combined with the decline in Prime signups, this could indicate a brief dip incoming for the stock. Despite that, analysts at CNN remain bullish, calling AMZN a 10/10 stock to invest in. Out of 71 analysts surveyed by the platform, 94% suggest selling, while the remaining 6% are opting to hold onto the stock, not sell. Furthermore, the platform suggests a maximum surge for the stock to $306 over the next 12 months: an ROI of 36.5%.