Investment Opportunities: A Comparison of Amazon and Opendoor Technologies as Top Buys Today
In the realm of technology and real estate, two companies have been making waves - Opendoor Technologies and Amazon. While Opendoor aims to revolutionize the housing market, Amazon continues to dominate the e-commerce landscape.
Opendoor Technologies, having gone public via a special purpose acquisition company (SPAC) merger in late 2020, has been grappling with challenges. The iBuying process, a low-margin business model, ties up a significant amount of capital while unsold houses sit on the balance sheet. The resulting spike in mortgage rates and higher home prices created problems for Opendoor, causing significant losses on homes it struggled to sell for a profit.
Recent operational progress, such as narrowing adjusted EBITDA losses and cost cuts, has been noted. However, the company remains fundamentally challenged by structural headwinds in the housing market. Opendoor's stock has cratered since its public debut, with the most recent surge over 500% in less than a month, primarily driven by retail investor enthusiasm, social media hype, and a short squeeze rather than fundamental business improvements.
In contrast, Amazon continues to show steady growth. Its core e-commerce business remains a leading global retailer, while its AWS cloud services division grows rapidly and generates high margins, contributing to Amazon's overall profitability and cash flow. Amazon's diversified revenue base and proven growth pathways generally imply less risk compared to a turnaround play like Opendoor.
Eric Jackson, a hedge fund manager, believes Opendoor's cost-cutting, pivot to partnering with agents, and lack of direct competitors offer a path to significant upside over the coming years, comparing it to Carvana's remarkable turnaround. However, he acknowledges the risks associated with Opendoor stock, setting a high target for shares of $82.
Amazon, on the other hand, is a safer stock to own. Its lucrative cloud unit, Amazon Web Services (AWS), is poised to grow significantly over the coming decade and beyond. Analysts estimate Amazon will grow earnings by an average of 21% annually over the next three to five years.
In summary, Opendoor represents a high-risk, speculative investment centered on a potential housing market recovery and operational turnaround, currently driven more by hype than fundamentals. Amazon offers a more stable, steadily growing investment grounded in diversified and resilient e-commerce and cloud service businesses. Investors seeking growth with lower volatility are typically better served by Amazon, whereas Opendoor could offer higher returns only if it successfully executes its turnaround amid uncertain market conditions.
[1] MarketWatch. (2025, August 1). Opendoor surges 400% in two weeks, but stock still 90% below 2021 highs. [online] Available at: https://www.marketwatch.com/story/opendoor-stock-soars-400-in-two-weeks-but-stock-still-90-below-2021-highs-11629511139
[2] CNBC. (2025, August 3). Opendoor's stock surge is a 'meme stock' rally, analysts warn. [online] Available at: https://www.cnbc.com/2025/08/03/opendoor-stock-surge-is-a-meme-stock-rally-analysts-warn.html
- Despite the recent surge in Opendoor's stock, it remains a high-risk, speculative investment, as analysts attribute its growth to retail investor enthusiasm, social media hype, and a short squeeze rather than fundamental business improvements.
- Amazon, with its lucrative cloud unit, Amazon Web Services (AWS), poised for significant growth, offers a more stable, steadily growing investment with less risk compared to Opendoor, as its overall profitability and cash flow are underpinned by diversified and resilient e-commerce and cloud service businesses.
- In contrast to Opendoor's uncertain market conditions and turnaround play, Amazon's proven growth pathways and estimates of growing earnings by 21% annually over the next three to five years make it a better choice for investors seeking growth with lower volatility.
