Amazon vs SHEIN

Amazon vs SHEIN + Temu, Micron -7%, Nike -12%, Walgreens -22%, Rapid7 +5%]

Amazon reportedly held private sessions with Chinese sellers, planning to launch a new section on its site dedicated to low-priced fashion and lifestyle items, similar to SHEIN and Temu. Amazon will ship these products directly from China to the U.S., aiming for delivery within nine to eleven days. This move is likely a response to the growing threat from Chinese platforms, reinforcing Amazon’s strong market position. As a result, PDD stock dropped 5%, while AMZN rose 2% following this news.

Micron stock fell 7% yesterday despite exceeding both revenue and earnings estimates in its latest quarterly results. The stock has doubled since last year, fueled by its involvement in the AI market, particularly through its memory chips used in Nvidia’s H200 GPU. However, high expectations have led some investors to take profits after the strong run. The AI trend, however, remains robust.

Nike is facing challenges, updating its guidance with a projected 10% sales drop in the current quarter, worse than analysts' 3.2% decline estimate. The company also expects a sales decline in FY25 instead of an increase. Consequently, Nike's share price fell 12% during after-market hours.

Walgreens, the second-largest pharmacy chain in the US, is experiencing significant difficulties with too many stores and sluggish sales. The CEO stated, “Seventy-five percent of our stores drive 100% of our profitability today,” suggesting a potential 25% reduction in stores. The traditional brick-and-mortar pharmacy model is under pressure as customers increasingly buy medicine online and via telehealth services. Walgreens has had to cut its outlook, disappointing investors and analysts. Additionally, Walgreens is the major shareholder of VillageMD, and the latter is planning to shut down 160 VillageMD clinics and reduce its investments after a $6 billion loss on this investment. As a result, Walgreens stock plummeted 22%.

Ending on a positive note, Jana Partners, an activist investor, has built a stake in Rapid7 and is urging the cybersecurity company to sell itself. Rapid7 stock jumped 5% on the news. This development positively impacted other cybersecurity stocks, with gains seen in SentinelOne (+8%), Zscaler (+6%), Varonis (+6%), Palo Alto Networks (+5%), and Okta (+5%).|