Amazon (AMZN) shares are slightly down at the time of writing after the e-commerce giant announced that it is changing its AI shopping approach by shutting down its standalone Rufus chatbot and making Alexa the center of its AI shopping strategy. Indeed, Amazon launched Alexa for Shopping, which is an e-commerce assistant that can answer questions, compare products, recommend items, and perform certain actions on behalf of users.
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Trade AMZN with leverageThe company says the tool combines parts of Rufus and Alexa+, while using shopping history, customer reviews, product data, inventory information, and delivery estimates to create a more personalized shopping assistant.
Users will be able to access the new assistant through a cursive “A” icon on Amazon’s website and app, as well as through Echo Show devices. A Prime membership will not be required. Amazon is making this move as AI shopping becomes more competitive, with OpenAI, Google (GOOGL), and Perplexity all testing tools that could change how people buy products online.
Why Amazon’s AI Shopping Bot Has an Advantage
However, Amazon argues that it has an advantage because it controls:
- A massive product catalog
- Customer reviews
- Real-time shopping data that outside AI bots may not have
Still, the change could affect third-party sellers, since Alexa will now take up valuable space in search results where sponsored listings usually compete for attention. Amazon says ads may appear in Alexa for Shopping when relevant, but the company argues that the goal is to help customers discover more products rather than narrow the market.
Is Amazon a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 45 Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMZN price target of $318.23 per share implies 19.9% upside potential.
