SPECIAL REPORT The Top 7 Stocks for 2024

Even at This Price, Amazon Stock Could Drive Major Growth for Long-Term Investors


  • Amazon (AMZN) remains among the top e-commerce stocks long-term investors ought to consider.
  • The company recently reported it overtook FedEx (FDX) and UPS (UPS) as the largest package delivery company in the U.S.
  • Additional chatbot features and cloud tailwinds could propel this company’s growth even higher.
AMZN stock - Even at This Price, Amazon Stock Could Drive Major Growth for Long-Term Investors

Source: Tada Images / Shutterstock.com

For investors looking for a top e-commerce stock to buy, Amazon (NASDAQ:AMZN) has been it in recent years. Indeed, 2023 was no exception, with AMZN stock experiencing a robust 70% year-to-date surge after a period of lateral movement. While shares haven’t yet reached their November 2021 peaks, some analysts anticipate an imminent return. Rated a “strong buy” by 41 analysts, Amazon has an average 12-month price target of $175.51, suggesting a 20% upside, with the highest target at $210.

In Q3, Amazon reported a 13% year-over-year sales increase, with its international segment growing by 16%, and AWS revenue rising by 12%. Operating income reached $11.2 billion. While much focus is on its core e-commerce and AWS businesses, Amazon’s advertising segment deserves attention, boasting a 26% year-over-year revenue surge, outpacing competitors. In Q3, Amazon’s ad revenue hit $12 billion.

Here are some more recent news and updates that will make you buy AMZN stock now.

Recent AWS News

Amazon, after a 49% share decline last year, rebounded in 2023 with a 76% increase as of November 27. The $1.5 trillion company focuses on generative AI leadership and anticipates a robust holiday shopping season for continued growth. 

Despite facing a significant battle with the U.S. government, Amazon gained momentum, with a third-quarter earnings report exceeding expectations and propelling a 24% increase in stock value since October 26.

On Cyber Monday, Amazon’s shares rose by 0.7%, fueled by expectations of a robust online shopping day. A report revealed that Amazon surpassed FedEx (NYSE:FDX) and UPS (NYSE:UPS) as the largest U.S. package delivery firm. 

The Wall Street Journal highlighted Amazon’s dominance, noting it outpaced UPS in 2021 and FedEx in 2020. The company had already delivered over 4.8 billion packages domestically before the holiday season, with projections aiming for 5.9 billion by year-end, a surge of 700 million from 2022.

Salesforce Deal

Amazon shares surged after the announcement of an expanded Amazon Web Services (AWS) partnership with Salesforce (NASDAQ:CRM). The collaboration aimed to deepen integrations in data and AI, introducing select Salesforce products on the AWS Marketplace. Amazon shares hit their highest point since April 2022. 

Salesforce CEO Marc Benioff highlighted the innovation potential in the new AI era for all customers. On the same day, Salesforce shares rose by 0.2%, while FedEx and UPS shares dipped by 1.6%.

New AI Chatbot for Corporate Customers

Amazon unveiled Q, a new chatbot designed for workplace use, at the AWS Reinvent conference in Las Vegas. This move signals Amazon’s ongoing competition with Microsoft and Google in the realm of productivity software, following OpenAI’s launch of the ChatGPT chatbot a year earlier.

Named after iconic characters from James Bond or Star Trek, Q is Amazon’s new chatbot, now available in preview with free features. Post-preview, the business user tier is $20/month, while the extended version for developers and IT professionals is $25/month. Copilot for Microsoft 365 and Duet AI for Google Workspace are priced at $30/month for business users.

Q, AWS’s new chatbot, simplifies AWS understanding and troubleshooting. Available in apps like Salesforce’s Slack and developers’ text-editors, it’s also integrated into AWS’ Management Console. Q supports over 40 enterprise systems, allowing discussions on Microsoft 365, Dropbox, Salesforce, Zendesk, and AWS’ S3 data-storage.

Additionally, users can upload documents, seek Q’s AI-driven assistance, and even witness automatic changes to source code, reducing developer workload. This multifaceted tool is anticipated to streamline operations for AWS customers, particularly developers and cloud administrators.

Buy AMZN Stock Now

Amazon’s AWS, a robust and secure web service platform, empowers over 100,000 users to create customized generative AI tools. This accessibility hints at a future where companies offer “DIY AI” packages, likely hosted on AWS, positioning Amazon as a key player in the AI ecosystem.

Overall, Amazon is so much more than an e-commerce company. But with the cash flow and stability this massive business provides, the company is easily able to invest in its other high-growth endeavors. That’s why I own the stock, and why I think long-term investors ought to consider this name at its current valuation.

On the date of publication, Chris MacDonald has a LONG position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

Article printed from InvestorPlace Media, https://investorplace.com/2023/12/even-at-this-price-amazon-stock-could-drive-major-growth-for-long-term-investors/.

©2024 InvestorPlace Media, LLC