Potential FTC antitrust suit against Amazon may hang over the stock: Analyst

Brian Sozzi

Amazon (AMZN) investors may have to endure some near-term black clouds as the Federal Trade Commission (FTC) lurks.

"Anytime something regulatory comes into the headline, it's going be an overhang," Goldman Sachs managing director Eric Sheridan told Yahoo Finance Live at the Goldman Sachs Communacopia and Tech Conference in San Francisco (video above). "I will tell you until this lawsuit probably gets filed, the next three weeks will be investors asking me, 'What do you think is going to be in it, and what could the potential outcomes be?'"

An Amazon Prime logo appears on the side of a delivery van as it departs an Amazon Warehouse location.
An Amazon Prime logo appears on the side of a delivery van as it departs an Amazon Warehouse location in Dedham, Mass. (Steven Senne/AP Photo, File) (ASSOCIATED PRESS)

Sheridan provides coverage on Amazon, Meta, and other big-cap tech companies for clients. He has Amazon as his "top pick" for the next 12 months.

The two mega forces appear to be on a collision course.

Execs at Amazon haven't offered concessions to the FTC in the pursuit of a settlement regarding antitrust claims, The Wall Street Journal reported on Wednesday. That has reportedly set the table for the FTC to file a lawsuit against Amazon later this month with an eye toward breaking up the e-commerce and cloud computing powerhouse.

A spokesperson for Amazon declined to comment to Yahoo Finance on the matter.

However, Sheridan added: "We still put a low probability on [a breakup of Amazon]."

Investors appear to be assigning the same low probability to an Amazon breakup too.

Amazon stock closed out six straight months in the green in August, Yahoo Finance's Allie Garfinkle pointed out. That rise, which marked Amazon's longest consecutive streak of monthly gains since July 2011, was fueled by better-than-expected second quarter earnings.

The tech giant has gained more than $400 billion in market cap since the beginning of its winning streak. Shares are up 62% year to date, outperforming the 16% gain for the S&P 500.

Read more coverage of the 2023 Goldman Sachs Communacopia + Tech conference:

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Yahoo Finance's Alexandra Garfinkle contributed to this story.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.

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