Amazon has proven to be a great investment for some lucky investors, with its shares increasing by 4,760% since May 2004. As the company continues to grow, now valued at a staggering $1.9 trillion with $575 billion in net sales in 2023, investors may be wondering if it is still a good stock to buy.
Despite its massive scale, Amazon still has room for growth in the future. Online shopping currently only accounts for less than 16% of all retail spending in the US, leaving ample opportunity for Amazon to capture more market share. With its dominant presence in the e-commerce space, Amazon is well-positioned to capitalize on the ongoing shift towards online shopping, with almost 40% of all online spending in the US going through Amazon.
Additionally, Amazon Web Services (AWS) is a key growth driver for the company, with a focus on cloud computing. AWS has seen 17% revenue growth in the first quarter and is on track to reach an annualized run rate of $100 billion. With a 31% operating margin, AWS is expected to continue driving Amazon’s overall results in the coming years.
Furthermore, Amazon’s digital advertising business has been growing rapidly, with $11.8 billion in revenue in the past three months. With a diverse set of AI-related products and services, AWS is attracting major customers like Accenture, Siemens, and Volkswagen, positioning itself as a crucial infrastructure partner for businesses transitioning to a cloud-based environment.
Considering these growth factors, Amazon’s stock is not expensive, trading at a price-to-sales ratio of 3.3, in line with its historical average. In addition to its growth potential, Amazon also boasts a significant competitive advantage with its unparalleled scale in e-commerce and data capabilities through AWS.
Overall, Amazon remains a solid investment choice with its strong growth prospects, competitive advantage, and diverse revenue streams. Analysts expect Amazon’s revenue to grow at a CAGR of 11.2% between 2023 and 2026, making it an attractive option for investors looking for long-term growth opportunities.
In conclusion, Amazon’s continued growth trajectory, coupled with its solid competitive position and diverse revenue streams, make it a compelling stock to consider adding to a portfolio. Investors can benefit from Amazon’s strong fundamentals and long-term growth prospects, making it a valuable addition to a well-rounded investment strategy.
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https://finance.yahoo.com/news/amazon-good-stock-buy-now-075000342.html