Amazon has made a surprise last-minute bid to acquire TikTok’s US operations, just days before a looming Saturday deadline that could see the popular app banned in the United States if it is not sold by its Chinese owner, ByteDance. The retail giant submitted its offer through a letter addressed to Vice President JD Vance and Commerce Secretary Howard Lutnick, as reported by the New York Times.
This unexpected move comes amid a backdrop of mixed market signals regarding Amazon's future. Financial experts are divided on the company’s outlook, with some raising alarm bells about its performance, while others view the current situation as an undervalued opportunity.
Jeff Bezos, Amazon’s founder and executive chairman, has been working to mend his relationship with President Donald Trump, which has been strained in the past. This bid for TikTok may represent a significant shift in their interactions, especially considering Bezos’ previous criticisms from Trump during his first term, largely due to Bezos’ ownership of the Washington Post.
In recent months, Bezos has taken steps to improve this relationship, including ensuring that the Washington Post does not endorse a candidate in the upcoming 2024 election, signing a $40 million deal to license a documentary about Melania Trump, and even donating $1 million to Trump’s inauguration fund. Bezos attended the inauguration with his fiancée, Lauren Sanchez, further signaling his intent to mend fences.
The potential acquisition of TikTok could bolster Amazon's position in the growing market of social shopping. TikTok Shop, a feature that allows users to purchase items directly from their video feeds, represents a shift in how consumers engage with e-commerce. Jasmine Enberg, an analyst at eMarketer, noted that nearly half of TikTok’s US users make purchases through the app. She stated, “Amazon’s reported bid is proof of TikTok’s prowess in e-commerce and the changing nature of how consumers shop and buy.”
As Amazon seeks to expand its reach among younger shoppers who prefer completing purchases on social platforms, the acquisition could also enhance Amazon's advertising business, which charges retailers for prominent placements in search results.
Despite the seemingly promising aspects of this bid, market experts are not all convinced about Amazon’s current standing. Ron Westfall, Research Director at The Futurum Group, expressed concerns, citing “alarm bells” regarding Amazon’s performance. He pointed to softening consumer spending reported by major retailers like Walmart and Delta, as well as Amazon’s first-quarter fulfillment guidance falling short of expectations. Westfall warned that increased US tariffs on China could adversely affect Amazon, considering that 25% of its products are sourced from the country. He also highlighted that economic caution might impact Amazon’s cloud business.
On the other hand, Chris McMahon, CEO of Aquinas Wealth, believes Amazon is currently undervalued, largely due to the strength of its cloud business, Amazon Web Services (AWS), which generates $100 billion in annual revenue and is growing at an impressive rate of 20% yearly. McMahon has set a price target of $280 for Amazon’s stock, emphasizing that the retail giant is outperforming competitors such as Walmart and Costco.
Megan Brantley, VP of Research at LikeFolio, shared a more moderate perspective. She noted that following recent stock pullbacks, Amazon shares “are starting to look appealing” and present a good “buying opportunity.” Brantley reported that Amazon’s recent Spring Sale, which concluded on March 31, 2025, attracted significant consumer interest, marking a rebound for its e-commerce unit, which had previously struggled to gain traction.
Brantley characterized Amazon’s e-commerce business as “resilient,” attributing its success in part to its Prime program, which fosters customer loyalty. However, she acknowledged a loss of momentum as middle and lower-income consumers are beginning to cut back on spending.
In the stock market, Amazon’s shares rose by over 2% on April 2, 2025, following reports of its bid to acquire TikTok. This increase reflects investor optimism about the potential acquisition, despite the administration reportedly not taking Amazon’s bid seriously.
The deadline for TikTok to find a non-Chinese buyer or face a ban is set for April 5, 2025. President Trump has previously stated that a deal to sell the app, which is used by approximately 170 million Americans, would be finalized before this deadline. As discussions continue, U.S. venture capital firm Andreessen Horowitz is reportedly in talks to invest in TikTok, which could play a role in the acquisition process.
Meanwhile, private equity firm Blackstone Group is considering a minority investment in TikTok’s U.S. operations, and other potential suitors, including Walmart and Microsoft, are also in the mix. Investors and analysts are expressing frustration over the delay in decision-making, with some warning that missing the deadline could be viewed as a public failure.
As the April 5 deadline approaches, Amazon finds itself at a crucial juncture, balancing political reconciliation with Trump, expanding into social commerce, and navigating a complex economic landscape. The outcome of this bid could have significant implications for the future of both Amazon and TikTok in the U.S. market.
