Is Amazon a Good Stock to Buy?
In the last decade, one sector which has seen a continuous rise is Information technology. Today computers and digital technologies have taken center stage in our day-to-day lives.
The use of the internet and online dominance has brought a significant change in our lifestyle as it has reduced everything and all activities to a laptop or computer.
The power of the internet means a change in the way we travel, buy things we require, advertise, or work.
Gone are days people used to go to offices and physical presence was mandatory to work, but now simply connecting your computer to the internet allows millions to work from the comforts of home and earn money without facing the hassles of spending long hours traveling to and from home to offices.
Amazon a company that has been one of the pioneers of leading this digital change in multiple business lines is the topic of our concern today as we analyze the company and give you reasons to validate Is Amazon a good stock to buy.
What is Amazon?
Before we move into the topic of Is amazon a good stock to buy let’s first get to know about the company. I am sure you must have heard of it but how much do you actually know about the company and its business. Let’s find out…
Amazon Business Overview
Amazon Inc is a multinational company based in the United States of America and is engaged in the business of providing e-commerce services, digital streaming of OTT-based videos, cloud computing, and Artificial Intelligence.
It is known to be one of the most valuable brands known globally and has expanded to almost every geographical land possible in its business.
It is famous for disrupting business with cutting-edge digital technology and innovation and is known to be the largest online retail marketplace in the world you can buy almost everything through the amazon eCommerce website or mobile application.
It along with Alphabet, Apple, Meta, and Microsoft form the big 5 companies of IT in the USA.
The company was originally founded as an online marketplace of a book or a digital bookstore but slowly expanded its feet into a marketplace of almost everything a move which has helped it to grow exponentially over the years into an e-commerce giant.
Stock Price: $122
CEO: Andy Jassy
Founded: 5th July 1994
Headquarters: Seattle Washington and the Virginia United States of America
Founder: Jeff Bezos
Market Capitalization: 1.25 $ Trillion
P/E Ratio: 59.37
Product and Service Portfolio: Amazon retail or eCommerce store, Amazon Prime (OTT), Echo Fire tablet, Fire TV, FIRE OS Kindle, Amazon Alexa, Amazon Luna, etc.
Is Amazon a Good Stock to Buy? | 7 Reasons Why
If you read or listen from someone Amazon is a good stock to buy, will you believe it 100%, I don’t think so and you have the correct attitude towards buying stocks if you don’t believe words of mouth or anything you read.
So we have researched and prepared some of the best points to answer your question “Is amazon a good stock to buy?” with an affirmative.
1. Amazon stock is a long-term gold
If you check the stock prices of amazon you might have witnessed a drastic decline in its share price, it has fallen approx.. 31% in the last 1 year from $180 to a current value of $122 to the bright side it has recovered from the lows of near $100.
The one-year price trend does pose a threat in your mind “Is amazon a good stock to buy?” but let’s understand the scenario.
If you check the performance of Amazon’s stock over the last 5 years it has risen by 139%. Its business is doing good and there has been a number of macroeconomic factors like inflation, covid, and the Russia Ukraine war which are affecting the stock market in general.
So we recommend considering this an optimal time to enter into stocks of Amazon and keep buying on dips and wait over the long term to reap the rewards of value investing.
2. Growth in Revenue from Amazon Web Services
Amazon is not only about the eCommerce services it provides but it also has a highly efficient and strong amazon web service or AWS business in place.
It’s a cloud-based service that helps keep their client’s technology to be maintained in the cloud in a secure manner.
Profits have also been increasing with a 57% jump in the last financial year.
It has been very effectively improving the bottom line of Amazon and is one of the key factors why Amazon can make a serious turnaround in its stock performance in the coming days.
3. Strong and Efficient Management
One of the biggest positives about Amazon as a company that makes it’s stock a must-buy is its strong and efficient management of Amazon.
With Jeff Bezos at the helm as executive chairman and CEO Andy Jassy working efficiently in diversifying amazon’s business successfully the strong management team puts an extra sense of assurance in the minds of investors to put their money in Amazon’s stock.
4. Exploring New Opportunities
Amazon has used its eCommerce reach to diversify its business into manufacturing and selling amazon brands of products in a variety of types which have been selling in good numbers driving sales upward.
This shows how as a company it has successfully diversified its business and growing with its steps.
5. Market Leader
Amazon is the market leader in online retail services and no competitor is even near its customer base and strong supply chain which helped them to deliver products even during the lockdown.
The company has been able to deliver to even remote areas of several developing countries like India which allows them to earn significant revenue as many other online retailers are unable to provide services in all areas of developing nations.
Being the market leader in the e-commerce business is a strong reason why one should have faith in Amazon being profitable and consider its stock to be one of the best to invest in.
6. Brand Loyalty and Increasing User Base
One of the key strategies of Amazon which allows it to have amazing customer resistibility and continuously attract new customers is the one in all packages it provides.
Just register to be an amazon prime user and you would get amazing deals on the eCommerce services, free OTT service to amazon prime, and free subscription to Amazon music and other amazon web services.
The low cost and the high number of services provided by Amazon is a great business model which has been one of the biggest reasons we feel its business may never go down.
7. Amazon prime Viewership
Amazon runs its own OTT-based service known as Amazon Prime, with growing subscribers and continuous growth of revenue through Amazon OTT it shows how Amazon is able to diversify well even under stiff competition from Netflix and Disney Hot star.
It also attracts customers to the prime membership plan which helps them to add customers in the eCommerce sections as well and hence effectively amazon prime has been a double-edged sword helping amazon grow in customers.
So these are the 7 Reasons which answer your question of Is Amazon a good stock to buy, we hope that the conclusion is clearly in front of you and you now agree that yes amazon is a good stock to buy.
FREQUENTLY ASKED QUESTIONS (FAQs)
What is the minimum requirement to buy an amazon stock?
You will require to be registered to a brokerage account to buy an amazon stock and there is no fixed minimum amount of money required to buy amazon stocks as one would require to pay the CMP of 1 stock at a minimum to buy a stock of amazon
So what is your conclusion after reading this article and knowing more about Amazon in detail, Is Amazon a good stock to buy?
We understand there might have been apprehension about buying this stock due to its dwindling performance over the past year but as we said before it’s a stock for long-term investment and not for short-term trading.
In fact, considering long-term investment in mind it’s one of the best stocks to buy as it’s currently trading at a cheaper price despite a good performance by the company and the fundamentals stand strong.
We tried to back our answer to the question is amazon a good stock to buy with some of the top reasons which make it one of the best companies in the world.
So if you are convinced don’t wait to add this stock to your portfolio before its share price shoots up.
We believe we kept you engaged and interested in the topic throughout this article, and would hope that you would keep reading insightful articles from us in the future…