Shares of Amazon (AMZN -1.01%) climbed higher on Wednesday, adding as much as 2.3%. As of 12:30 p.m. ET, the stock was still up 1.8% despite a generally down day for the market.
The catalyst that sent the e-commerce platform higher was an initial read that suggested that consumers were flocking to the company's annual Prime Day sale.
Amazon's yearly "Christmas in July" sale kicked off yesterday, and early sales data suggests a blowout. The company generated roughly $6 billion in sales thus far, up nearly 8% year over year, according to data compiled by Adobe's Digital Economy Index. If those numbers hold -- and there's no reason to believe they won't -- that would mark the biggest shopping day of 2022 thus far.
Shoppers flocked to Amazon's platform to take advantage of some of the company's best deals of the year, and a few of the best-selling items were surprising. While Amazon's signature electronic devices, including its Fire TV Sticks and Echo Dot, continued to be top sellers, consumer staples Frito-Lay variety pack and Procter & Gamble's Dawn Powerwash Dish Soap both made an appearance.
The news comes just as data from the U.S. Bureau of Labor Statistics reported a spike in inflation last month. The Consumer Price Index (CPI), the most widely followed measure of inflation in the U.S., surged 9.1% year over year, reaching a new 40-year high. So it's easy to see why consumers were looking for bargains.
A successful Prime Day would be a much-needed win for Amazon, which has seen its stock decline by 33% so far this year as tough comps and slowing e-commerce adoption have weighed on investor sentiment.
In spite of the negativity, however, there are reasons to be bullish. During the first quarter, Amazon's net sales grew 7% year over year. But excluding the unfavorable impact of foreign exchange rates, net sales grew 9%. Difficult pandemic-related comps also weighed on the results but should ease over the coming year, leading to more normalized growth.
Given its industry-leading position in both e-commerce and cloud computing, Amazon stock is a buy, particularly while it's still on sale.