Is Amazon Stock the Best Prime Day Deal?

In this podcast, Motley Fool host Anand Chokkavelu and contributors Jason Hall and Matt Frankel discuss: The Aug

This year's four-day Prime Day (and whether Amazon stock is a deal)

Elon Musk's political party and Tesla

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A full transcript is below

Anand Chokkavelu: What are you buying today

Motley Fool Money starts now

I'm Anand Chokkavelu and I'm joined by two of my favorite Fools, Matt Frankel and Jason Hall

They we're talking Amazon's Prime Day

It's more a prime week at this point, the on Tesla and Elon Musk, and we'll make some bold predictions

But first, let's ourselves on tariffs

What's going on there, Matt

Matt Frankel: Well, the tariff news seems to be changing so quickly

We're only recording this a few hours before it's being published, and I'm worried, if I'm being honest

The president announced a whole new round of tariffs yesterday, set to begin on August 1st for 14 countries, and that includes Japan and South Korea, which are our Number 4 in six trading partners, actually

Some of the announced rates were as high as 40%

The president also said that the August 1st date is not set in stone

He said, "It's firm, but not 100% firm. " I really think this is more noise than news at this point

Remember the initial Liberation Day tariff rates with the thing that looked the cheesecake factory, [laughs] and then the pause that was announced until July 9th

This might be an effective negotiation tactic to get better trade deals

To be fair, it looks it might be

But until anything actually goes into effect and is actually finalized and signed by both parties, it's noise

But in other tariff news, there is a good possibility that we're going to see a European Union trade deal soon

Each of the countries in the union are small trading partners, but collectively, they actually would make up our number one trading partner in terms of both imports and the trade deficit we have

It's definitely worth watching

Jason Hall: From an perspective, maybe the Taco trade's real and still a

We've got another extension, another delay here, so there is a group that are going to say it's another chicken out moment

But I don't know if that's really investable for most of us

But thinking the broad economic impact, I do think that for our trading partners, they're in a tough position

There's the tension between continuing to delay and avoid substantial tariffs because it seems they keep getting kicked down the curb

But also, all of their industry and government spending, they still have to plan, too

All of the uncertainty weighs in there

But if you look at the, it seems the are just shrugging this off is what's become as usual

Maybe it's this fall before we really find out if litigation continues to play out, and eventually this ends up at the Supreme Court, it might have been a whole lot of work for the Supreme Court to say, hey, Congress, you guys need to do something

The president can't do this

Anand Chokkavelu: Jason, today's Amazon's Prime Day

This is Amazon's once brilliant move to juice sales during the summer doldrums, maybe pull forward some of that back to school shopping, taking a little market

It's grown to four days long now

It's doubled from last year

Any takeaways for investors

Is Amazon's stock priced as a Prime deal at this

Jason Hall: You're not including the early days, the pre-Prime days deals that they do for people that can't hold off and wait for the four whole days

My wife may or may not have changed my Amazon password as an Amazon shopper

I'll tell you, there are some things that I'm looking at, for sure, but there's not much of an takeaway from that

It has become an event

It's become a retail event

But if we start looking at the, the e-commerce has really bounced back

There was some much needed restructuring a couple of years ago of expenses after the massive expansion during the pandemic

But that added scale, it's really, really paying off

Here's another interesting data point

Amazon's role as a giant in fulfillment has also exploded along with its own sales

But on AWS is still the big fit driver

Now, the stock, is it a Prime day deal

Trades for less than 21 times operating cash flow

If you look back over the past decade, that's cheap

But they need to right now, especially building up the infrastructure and R&D spending, but only time is going to tell if it can start converting those investments into free cash flow

Matt Frankel: AWS is definitely the biggest fit driver for now

You also didn't mention the advertising that they're building out

That's one of the faster growing parts of their revenue, which is nically reported under the e-commerce platform

But it's a higher margin type of revenue than it gets elsewhere

Amazon certainly is not as cheap as it was just a few months ago, but it still looks very attractively valued, considering the recent gress with both efficiency and fitability of the and all that growth you mentioned

Anand Chokkavelu: Well, you got to raise the price right before you do the discount. [laughs] It's just a little stock trick

Speaking of those deals, any top prime deals for your household, Jason

Jason Hall: I have to admit I'm eyeing a robot lawnmower

But I'm not convinced just yet, but since it's not Prime Day, it's Prime Week, you said, I got a little time to think it

Matt Frankel: In the past few years, we've bought the kids the new Fire tablets because they're so cheap on Prime Day

I haven't looked yet, but I'm sure my wife has and has a plan

I it when she does the shopping, because then when a bunch of packages show up and it's Christmas

Anand Chokkavelu: We've got a kid who never brushes his teeth and has destroyed his previous electric toothbrush, but we still waited a week to see if there are any deals

Spoiler alert, no deals on the specific toothbrush [laughs] we wanted

We also looked at Walmart and Target who do similar Remora to the Amazon Shark sales

I'm sure we'll be buying a bunch of stuff

Jason Hall: Well, Anand, do you know what you call a kid that won't brush their teeth

Anand Chokkavelu: What

Anand Chokkavelu: [laughs] Exactly

But this is where he's beyond the normal distribution

Matt Frankel: I was going to say you've won, too. [laughs] Anand Chokkavelu: Right

At least versus his brother and all of his cousins

Let's move on to the boy who may have cried wolf on focusing less on and more on Tesla

What's up with Elon Musk today, Matt

Matt Frankel: Oh, I assume you're talking the new political party that he's starting the American Party, because there's a lot that's up with Elon Musk

Between Tesla, between SpaceX, between xAI, between all the other things, there's a lot that's up with Elon Musk

He wanted to add one more thing to his plate by creating his own [laughs] political party

To be fair, he ran a poll on X, formerly Twitter, asking who would want a third party

Overwhelmingly from millions of votes and not just his own ers, through millions of votes 80% or so said yes

One of the party's stated goals is to get Republicans out of office who voted for Trump's bill

We all saw the big public fallout between him and the president

That's really what led to this

He describes the party as a centric, budget conscious, energy, and centrist party with the goal of drawing both disaffected Democrats and Republicans

Now, this is easier said than done

This is not the first attempt to create a third party

There are actually four or five of them already in existence that don't have any traction

It's very difficult to gain any traction as a third party

You would essentially have to set up a political party in all 50 states because all the local rules and things that, it's all different

You need a lot of money, which fortunately he has

How much he wants to spend on this is another issue

But he has the resources to do it if he wants to

Jason Hall: I think the take, if we circle back around to Tesla and is honored as you joked there at the beginning, the boy who cried wolf, ly, Tesla holders, as much as from a political perspective, I'm sure there's a lot of people, no matter your political affiliation, that are so frustrated with the environment that support the idea of this

Tesla needs to figure out how to start selling more Teslas

They need the resources from selling more Teslas to pay for so many things

The company is at a major inflection point right now

Dan Ives talked this with where they stand with trying to start bringing robotics to commercial use in the next few years

We've seen what's going on in Austin with autonomous driving

That's such a massive future part of the

You got to start selling more Teslas and generate the cash flow to fund these things

There's even more headwinds now with some things in the spending bill that was passed that are going to gut a pretty important part of Tesla's fitability with emissions credits

There's a lot of reasons for investors to certainly be concerned this wherever you stand as an engaged citizen

Anand Chokkavelu: Elon Musk is famous for his bold predictions

After this break, we'll have some of our own

Time for a segment we call bold predictions

What's your bold prediction

Jason Hall: I'm going to stick with the theme from the show today, Anand, and talk Tesla

I think Tesla's stock in the near term, it's bably going to rebound

But those robotics ambitions, the autonomous driving ambitions, I think they might be as successful as the Solar Roof has been so far, and that's to say not very

At least not within the next five years' time

Now, a couple of reasons why

Number 1, I think we've seen some very ambitious, you talked Musk's predictions things

They've accomplished a lot of great things, but always years and years later

I think that's going to continue to play out

But I think the concern that I have, and this is really at the heart of the prediction is that while the stock might rebound in the near term, I think the next few years are going to be really, really tough for Tesla and bably tough for Tesla holders because there's so much of those future spects that are baked into today's price

I think as the realization comes out that those things are going to take longer and longer to monetize, and they might be harder to monetize if Tesla can't start selling more Teslas instead of less Teslas, then holders may be really in for a tough time in the next five years or so

Matt Frankel: I'll make a very bold prediction, and I'm going to say that the Fed is going to surprise the market and cut rates this month when they meet at the end of July

But based on what the Fed governors have said, other than Jerome Pell, it's more ly than that to happen

I think there's a lot of economic data between now and then, a lot of trade deals that can be settled between now and then to calm the Fed's nerves

I think it's going to happen earlier than people think

Jason Hall: That would be positive for Tesla

Anand Chokkavelu: Here at The Motley Fool, we on back and Amazon gift cards

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Anand Chokkavelu: Jason Hall, Matt Frankel, the entire Motley Fool Money team, I'm Anand Chokkavelu

My bold prediction is that we'll see you tomorrow

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors

Anand Chokkavelu, CFA has positions in Amazon and Target

Jason Hall has no position in any of the stocks mentioned

Matt Frankel has positions in Amazon

The Motley Fool has positions in and recommends Amazon, Target, Tesla, and Walmart

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