Stocks of the online retail giant Amazon (AMZN 10.36%) have recovered somewhat from a scary slump last April. Now the stock is about 34% below the high mark it set last summer.
Is Amazon an excellent stock to buy at its slightly discounted price? Should Cautious Investors Stay Away? To answer these questions, we’ll weigh some reasons the stock is falling against reasons it could outperform over the long term.
Why some investors are avoiding Amazon
Amazon’s shares have been under pressure since the company reported an untypical net loss of $3.8 billion in the first quarter of 2022. More recently, the company reported another $2 billion in net loss in the second quarter.
In the early days of the COVID-19 pandemic, Amazon began spending heavily to keep up with demand. In about a year and a half, the company more than doubled the size of its fulfillment network. But the additional demand didn’t last as long as hoped and…