Investor concerns around agentic commerce being a threat to Amazon.com Inc.’s (NASDAQ:AMZN) advertising business appear to be "overstated," according to Rosenblatt Securities.
The Amazon.com Analyst: Analyst Scott Devitt maintained a Buy rating, while raising the price target from $335 to $360.
The Amazon.com Thesis: Personal agents and AI shopping assistants are causing the discovery and purchase funnel to shrink, leading to speculation that the company’s retail media model is at "risk of complete displacement," Devitt said in the note.
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Amazon has experience dealing with secular changes in consumer behavior, the analyst noted. Even if the advertising model changes, the company should be able to "navigate this period of transition largely unaffected," he added.
Devitt further noted that:
- Amazon keeps most of the transaction and fulfillment value even where it does not control the discovery layer.
- Early results from Amazon putting sponsored placements inside its agentic flows have so far been encouraging.
- Alexa for Shopping is being designed to own the entire funnel from intent to checkout.
Management believes Amazon users would continue beginning their journey within the ecosystem, "given the personalization, pricing accuracy, and inventory data that third-party agents still lack without proper integrations," the analyst further wrote.
Amazon’s retail operation may be "a net beneficiary of agentic commerce," Devitt said. Even with a decline in clicks, the company would benefit from a rise in transaction volumes, the analyst noted.
"Further, agentic commerce could expand awareness and the addressable market, accelerating overall eCommerce penetration and supporting an incremental tailwind," he wrote.
AMZN Price Action: Shares of Amazon.com had risen by 2.06% to $251.75 at the time of publication on Wednesday.
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