A New Report Shows Amazon Remains Popular as Ever

AMZN stock - A New Report Shows Amazon Remains Popular as Ever

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Piper Sandler released the results of its semi-annual survey Taking Stock With Teens on April 6. The findings were good news for Amazon (NASDAQ:AMZN) and owners of AMZN stock. 

The survey collected data from 7,100 teenagers between Feb. 16 and March 22. It gathered input from high school teens about their favorite brands, spending patterns and even political and social issues. If you’re a shareholder, you’ll be happy to learn Amazon’s e-commerce site is the favorite of 53% of teens, up from 52% in the Fall 2021 survey. 

While the overall news is good, only 35% of upper-income female respondents named Amazon as their favorite site, down from 47% in the Spring 2021 survey. This segment of teens isn’t nearly as enamored by Amazon’s e-commerce business. But if you own AMZN stock, that shouldn’t be a problem.

In 2021, Amazon’s global retail e-commerce sales were $614.03 billion. They’re projected to grow by 18.8% in 2022 to $729.76 billion. In the U.S., Amazon’s market share of e-commerce sales increased 110 basis points to 41.8% from 40.7% in 2020.

Further, Amazon accounted for nearly half of U.S. online retail growth in 2021. Lastly, the business generated by its third-party sellers in 2021 rose 33.9% to $107.7 billion.  

There was some softness in the company’s e-commerce numbers in 2021 compared to previous years. But overall, it’s still a juggernaut with very little real competition. 

However, it’s important to remember that its Amazon Web Services (AWS) segment drives profits. In 2021, it had an operating profit of $18.5 billion — 37% higher than in 2020 — on $62.2 billion in revenue. Moreover, the unit’s operating income accounted for almost 75% of Amazon’s overall profits, 15.4 percentage points higher than 2020. 

The latest news from Piper Sandler is a reminder to investors just how powerful the Amazon brand is with a wide swath of the U.S. population, especially teens. The company has so many levers to pull separate from e-commerce that it’s pointless to worry about the slight negatives from each quarterly report.

Take advertising. In 2019, it had $12.63 billion in revenue, considerably less than $19.21 billion from its subscription services. By 2021, it had grown to $31.16 billion, approximately $600 million less than Prime and the rest of its subscription services.

Except for its ongoing labor problems, a big concern, it’s all good at Amazon. This latest survey says so. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.


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