With over 200 million Prime members worldwide, Amazon (NASDAQ:AMZN) stock has revolutionized key industries. At the forefront of e-commerce innovation, Amazon has also revolutionized the cloud computing and online advertising markets. The company’s highly-profitable business model stands out as one of the best “wait and see” stories in the market, with decades of losses before turning profitable.
Given the company’s continued growth, Amazon’s current multiples (while high) still provide investors with excellent relative value compared to historical averages. With strong institutional ownership (at 62%) and a five-year compounded annual growth rate of 20%, investors continue to reap the benefits of holding AMZN stock for the long-term.
The company’s recent push into AI is exemplified by the company’s AWS Trainium AI accelerator and Inferentia AI chip. These recent developments, as well as the company’s investments in Anthropic, ensure Amazon will continue to grow over the long-term.
Here’s more on why investors may want to buy into Andy Jassy’s growth story, when it comes to Amazon as so much more than an e-commerce stock to buy.
Amazon’s Spring Sale
Amazon’s Big Spring Sale is the best time to shop for those who are a big fan of discounts. Amazon has offered discounts on unlocked phones and a few tablet models from Samsung, Google, Motorola, and OnePlus. The Samsung Galaxy S24 Ultra and Galaxy Z Flip5, which have foldable innovation and long-term support, are now lighter for your wallets.
From March 21 to 26, there will be a Holi Fiesta, which means more discounts for new and old phones and tablets. The iQOO Z9 holds a 50 mp primary camera, a 120Hz display, and the Dimensity 7200 chip. Or the iQOO Neo9 Pro is more your fancy, as it rocks the Snapdragon 8 Gen 2, with a 144Hz display and 120W fast charging.
Bezos’ Selling Movement
When the company’s excellent stock performance happened in February, Bezos sold about 50 million shares for $8.5 billion. The founder has a net worth of $202 billion, with most of his fortune invested in Amazon stock. Right now, Amazon is the sixth-most valuable stock among US-listed companies.
Over the last year, Amazon’s stock shot through the roof by 81%, topping both Apple and Nasdaq. Bezos’ massive sell-off of Amazon shares raises the possibility that the company’s perception has peaked despite solid earnings that sounded the alarms for sluggish growth.
This is certainly among the key headwinds long-term investors are watching. That said, Bezos continues to hold a massive stake in the company, and his sales plan was previously announced (and likely tied to his move to Florida, to avoid taxes). The market is brushing off this headwind, but it’s one to watch.
Continuous Success
Youseff Squali, a Truist analyst, stood by his Buy rating on Amazon with a $195 price target. He’s looking to see revenues surpass consensus projections and is in high spirits as he looks at the solid and promising trends in U.S. revenue growth. Amazon is poised for a successful Q1 thanks to a significant sales event and better demand trends.
Squali projected slightly above-consensus Q1 Revenues of $143.1 billion. He’s also looking at $24.5 billion for AWS, indicating a mild acceleration from Q2. Amazon’s advertising division will expand because of investments in e-commerce platforms and advertising tools, aligning with the company’s growth strategy.
AMZN Stock Remains a Buy
Amazon holds a 37% share in the U.S. e-commerce market, with quite an incredible and loyal customer base, driving strong free cash flow. The company is branching out its inventory and same-day delivery services. It has been investing in Prime Video and AI, witnessing its stock rise 77% in a year.
In combination with the company’s AI efforts, there’s a reason why this quality stock is trading around 62-times earnings. I think it’s still worth buying at these levels.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
