Technology Roundup – Amazon pauses merchant loan repayments, Apple mulls 5G iPhone delay
Amazon pauses merchant loan repayments
Amazon (NASDAQ:AMZN) is pausing loan repayments for sellers enrolled in the Amazon Lending program to help ease the impact of the coronavirus pandemic.
The pause will start tomorrow and last until April 30, and interest will not accrue during that time.
Amazon offers loans from $1,000 to $750,000 to help merchants acquire inventory, expand products, and advertise on the e-commerce platform.
Apple mulls 5G iPhone delay – Nikkei
Apple (AAPL +1.3%) is preparing for the potential delay of its 5G iPhone lineup that’s meant to launch this fall, according to Nikkei Asian Review sources.
Supply chain constraints could force the delay, but a source says that Apple is also concerned the coronavirus pandemic might lower consumer appetite for phone upgrades.
Early this year, the tech giant gave suppliers an aggressive target of 100M 5G devices for this year.
The sources say Apple is keeping an eye on the evolving situation and will make a decision by May at the latest.
Deutsche leaves Apple sidelines after sell-off
Deutsche Bank upgrades Apple (NASDAQ:AAPL) from Hold to Buy, citing the valuation after the recent sell-off, which has shares down nearly 16% YTD.
Analyst Jeriel Ong: “With the recent correction so far, we feel comfortable that investors will return to four drivers of the stock (iPhone, AirPods, Services, and GM mix shift) when the market stabilizes.”
Ong still sees near-term risks in the retail store closures and supply chain disruptions, but the analyst is optimistic about the company’s potential to earn $15/share in CY21.
Apple shares are up 2.5% to $252.98. The company has a Bullish average Sell Side rating.
State AGs ask Amazon, Walmart to prevent price gouging
The Pennsylvania-led group of state attorneys general call on Amazon (AMZN -1.9%), Facebook (FB -1.4%), eBay (EBAY +3.3%), and Walmart (WMT -4.7%) to prevent coronavirus-related price gouging.
In a letter to the companies, the AGs say there’s “an ethical obligation and patriotic duty to help your fellow citizens in this time of need by doing everything in your power to stop price gouging in real-time.”
Earlier this week, Amazon revealed it had suspended more than 3,900 selling accounts on its U.S. platform for price gouging. The number added to the tens of thousands of third-party products the company pulled earlier this month.
Last week, an email to some Amazon customers requested their cooperation with a Department of Justice investigation that was reportedly tied to unfair pricing.
Jefferies sees cost headwinds for Amazon
Jefferies analyst Brent Thill writes that Amazon (NASDAQ:AMZN) is facing cost headwinds due to staffing increases, one-day shipping investments, customers placing smaller orders, and the shift to lower-margin essential products.
Amazon’s demand has surged due to the coronavirus pandemic, which has left many local stores short on household and medical supplies.
Thill says that this “strain” on Amazon’s system “is unprecedented and will hit profitability.”
The analyst agrees with Amazon’s decision to focus on essential item shipments, but he thinks the move raises the risk of customers turning to rivals for non-essential products, potentially cutting into sales and profitability.
Jefferies maintains a Buy rating and $2,300 target on Amazon. The company has a Very Bullish average Sell Side rating.