Since the beginning of the year, Amazon stock has underperformed the market, losing 45% of its value over that period. That’s half the value. And there may now be an opportunity to buy the company at nearly half of its former value.
1) Amazon’s cloud service is starting to show a recovery, and while this growth is far from the numbers that were its beginning, it is already a good sign.
2) The company simply has enormous potential in the advertising market. With more than 300 million users, Amazon has a huge audience motivated to buy from both Amazon itself and its partner networks. In the third quarter, Amazon’s advertising business grew 25% to $9.5 billion.
Conclusion: Amazon is a cyclical company that probably won’t be able to avoid a recession if there is one. That’s bad news in the short term, but the good news is that its long-term prospects remain unchanged. And the 100% growth potential looks interesting.
