Best Stocks for 2018: Amazon Running Strong in the Home Stretch

It looks like AMZN stock won't back down from the No. 2 spot anytime soon

By Readers' Choice

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Editor’s note: This column is part of our Best Stocks for 2018 contest. The readers’ choice pick for the contest is Amazon (NASDAQ:AMZN).

The growth in Amazon (NASDAQ:AMZN) may have slowed somewhat in the last month. Still, the overall 2018 gains have put the readers’ choice stock in a good position if current Best Stocks contest leader Etsy (NYSE:ETSY) falters. Of course, it’s going to take a heck of a falter for AMZN stock to come out on top.

Year-to-date, ETSY has returned 146%.

Amazon stock has managed less than half that, at 68%. And let’s be real … most investors are probably giddy at the thought of their investment returning more than 50% in less than a year. Win or lose, this reader’s choice pick was an excellent one.

In fact, whether or not it wins the contest, there are still plenty of reasons why this recent dip in AMZN stock could actually be an excellent buying opportunity. It tapped the $1 trillion mark earlier in September, but the analyst world still thinks there’s plenty more growth.

Just consider the near-unanimous buy rating and target price north of $2,100.

Currently, they see this year’s revenues coming in at $235 billion and 2019 revenues at $287 billion. That’s expectations for growth of 32% and 22%, respectively. Longer-term, Amazon stock analysts also see earnings growing at a robust 45%-plus over the next five years.

AMZN Stock Just Keeps Proving It’s Among the Best Stocks

By now we all know the litany of reasons for AMZN stock’s incredible presence in the markets. It managed to upend basically the entire retail sector with its pioneering work in ecommerce, and now it’s looking to push the other way as well, with its cashier-less Amazon Go brick-and-mortar stores. And we can’t forget its cloud system, Amazon Web Services (AWS), is the dominant public cloud player and keeps making huge jumps in revenue. AWS revenue reached $6.1 billion in the second quarter, a gain of 49%.

But back to Amazon Go for a moment — who would have ever thought we’d be seeing physical retail locations as a viable growth driver for Amazon? Yet, they seem to have hit upon the best way to advance that concept. Sometimes you just need to go to a physical store, either because you need something immediately or it’s an item you don’t want to order online. By creating a store where you can just walk in, pick up what you need and walk back out, it makes the real-world shopping experience as close to their smooth Amazon.com checkout as possible. That’s a great way to entice shoppers in this day and age.

Then there’s Amazon 4-Star, another physical shopping location which just opened its doors in New York City. It seems like, as other retailers try to make their mark in online retail, Amazon is doing the reverse.

And with the holiday quarter still left, it’s entirely possible we could see even more growth into the end of the year. The biggest shopping days of the year are likely still ahead of us. While Black Friday itself may not be as big for Amazon as for its brick-and-mortar counterparts, remember that the shopping holiday did push AMZN stock to a record high last year.

Could it happen again? Only time can tell.

Jessica Loder is an assistant editor at InvestorPlace.com. As of this writing, she did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2018/10/best-stocks-for-2018-amazon-running-strong-in-the-home-stretch/.

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