Loop Capital Managing Director, Anthony Chukumba, joins Yahoo Finance to discuss how the departure of Jeff Bezos from Amazon doesn’t necessarily mean there will be major changes in Amazon’s company dynamic and his stance on resuming coverage on GameStop.

Video Transcript

[MUSIC PLAYING]

BRIAN SOZZI: Break out the box of Kleenex tissues, Amazon investors. Starting Monday, Amazon lifer and AWS wizard Andy Jassy will officially assume the CEO position from space fan Jeff Bezos. So what does the change in leadership mean for a stock nearing $3,500 a share? Anthony Chakumba is Loop Capital managing director, and he joins us now. Anthony, always good to speak with you here. So you're staying pretty bullish on Amazon. You have a, what, $3,775 price target on the stock. Why are you staying so optimistic, even with this big change at the top?

ANTHONY CHAKUMBA: Sure, that's a great question. I mean, first off, we just don't really think you're going to see any major strategic or operational shifts with Amazon, with this transition from Jeff Bezos to Andy Jassy. You have to remember, Andy has been with Amazon since 1997. And he's worked very closely with Jeff Bezos. He was his technical advisor for a while. He co-founded AWS with Jeff. He's on the S team. So I just don't really think that we're going to see a wholesale shift in strategy.

The other thing you have to remember is that Jeff Bezos is the largest Amazon shareholder with a 10% stake. He's also going to be executive chairman, assuming he makes it back from space OK. And so he's still going to have a lot of influence at the company. And then, finally, if it ain't broke, don't fix it. And with these record numbers that we're seeing from Amazon pretty much quarter after quarter after quarter, why would it make any sense for Andy to make any change in the strategy? So we don't really expect any major changes.

MYLES UDLAND: And along those lines, Anthony, something you flagged in your note to us, is, I mean, look at the last several years of Bezos's arc. He's clearly been a little bit-- I mean, it would seem he's been a little bit less engaged over the last maybe, let's call it, three years than he would have been 10 years ago. And so is that maybe a reason for investors to say, hey, this isn't such a big deal, even though the formal handover, again, does happen this week?

ANTHONY CHAKUMBA: I think that's 100% correct. So, look, I don't know exactly when the transition started. But he's been a very, very different CEO the last several years than he was in the early days of Amazon. I mean, you're seeing him go more Hollywood, right? He's showing up at these Hollywood premieres and at the Golden Globes and at the Oscars. He's got this new girlfriend. I guess it's not all that new at this point. It seems like he's more and more involved with Blue Origin. He's reportedly building this super yacht. So clearly, this has been a transition that has been years in the making.

BRIAN SOZZI: Anthony, then, what is Andy Jassy's biggest challenge?

ANTHONY CHAKUMBA: You know, I think that the biggest challenge for Andy, I think there's going to be two challenges. One is, look, he has been laser focused on AWS for the last several years and has done a spectacular job. I mean, AWS is-- I mean, I'd make the argument, it's one of the most powerful tech companies in the world. But he's never really had to focus nearly as much attention on the rest of Amazon's business, right? And this is a company that is increasingly diverse. They're doing a lot of different things that he hasn't been as involved in.

The second challenge is just going to be dealing with the regulatory-- not necessarily regulatory, but the antitrust, the growing antitrust animus towards Amazon. Obviously, Lina Khan is FTC commissioner now. I mean, she very famously wrote this "Yale Law Review" article, very anti-Amazon. And it'll be really interesting to see how that plays out. But that's one of the few things that Republicans and Democrats agree on, is that there needs to be more oversight and regulation of big tech. So I think that that will be a challenge for him as well.

MYLES UDLAND: And along those lines, Anthony, I'm curious, as an analyst, how you are thinking about those risks today. Is it something you have in your model? Is it something you're kind of monitoring? And at what point might that be a more material [INAUDIBLE] here, rather than just something fun for the media to talk about?

ANTHONY CHAKUMBA: Yeah, that's a great question. I mean, look, it's not something that I'm factoring into the way I think about Amazon. I think it's really tough to do that, quite frankly, because there still is so much uncertainty. I mean, just earlier this week, you know, you saw Facebook with this big court case that went their way and which makes me think that, once again, you know, any type of breakup of big tech is probably many, many years in the offing, if it's even going to happen at all.

The other thing is I'd make the argument that a breakup of Amazon would not necessarily be a bad thing. You know, I talked about AWS, which Andy, like I said, you know, co-founder, and it ran for many years. I mean, I think there's a credible argument to be made that AWS is not being fully valued by the market as part of Amazon. So I'm not sure if, worst case scenario, Amazon's broken up. That would be a bad thing from a shareholder value creation perspective.

BRIAN SOZZI: Anthony, a little more near term in nature, we've seen some reports over the past few days of a disappointing Amazon Prime Day. Have you had to lower your estimates at all?

ANTHONY CHAKUMBA: No, not at all. Look, I think that-- I mean, first off, remember, these are estimates, right? I mean, we haven't got any hard numbers from the company itself. And we're just talking about a 48-hour period out of a 90-day or so quarter. So it's not something, honestly, that I'm very concerned about.

BRIAN SOZZI: Anthony, while we have you here, you were the first analyst that we talked to on the Street that dropped coverage on GameStop. And you really-- I mean, just, this is ridiculous. It's hard. You just can't cover this company. But now that they have a new management team, a new board, are you inclined to relaunch coverage on a GameStop, or you just really continue to sit on the sidelines?

ANTHONY CHAKUMBA: Absolutely not. I will never, ever-- I'll say this on this show. I will never cover GameStop ever again. I mean, there's just no point. I mean, look, the stock is down from $483 to, I guess, $200. I still don't think it's worth anything even remotely close to that. I guess it's a nice segue from Amazon because they've hired a ton of Amazon executives.

But I just keep coming back to, you know, the doctor's prescription doesn't match the disease. I mean, you know, Amazon is a great e-commerce retailer. There's no question about that. But GameStop's primary problem is that more and more gamers are downloading video games. And so you can have a much better website, but it's really not going to make any difference. I mean, it's like going to the doctor and saying, doctor, I've got stage four lung cancer. And he gives you a prescription for erectile dysfunction. I mean, it just doesn't make a whole heck of a lot of sense.

BRIAN SOZZI: [LAUGHING]

MYLES UDLAND: All right, Anthony, thanks so much for that. Always fun to have you on. Really appreciate the time, as always. Anthony Chakumba with Loop Capital, appreciate the comments on Amazon. And I know we'll be in touch, Anthony. Have a great weekend.