With a market capitalization of $1.8 trillion and net sales of $575 billion in 2023, Amazon (AMZN 0.23%) is one of the most successful companies on the planet. It shows how strong the company is becoming, with its presence in a variety of consumer and enterprise markets.
The stock price has soared 907% over the past decade. But I don’t think we’ve missed the boat yet. Here are two must-know reasons to buy this FAANG stocks Like there’s no tomorrow.
Dominant in multiple industries
The first, and perhaps most obvious, reason why investors should rush to buy shares of this tech giant is its dominance. And in Amazon’s case, the company is a leader in multiple industries, making this business uniquely positioned.
The company’s bread and butter segment remains vast e-commerce Marketplace had 4.5 billion visitors to its website in January. His fourth quarter 2023 sales for this segment, which includes both online stores and third-party seller services, were $114 billion. Despite macro headwinds, that number was up 13% year over year.
According to Statista, 38% of all online spending in the US goes to Amazon, which is far ahead of Amazon. walmart, is in second place with a 6% share. Over the next decade, as e-commerce activity gradually erodes in-store shopping, who will benefit more than Amazon, thanks to its massive logistics hub that delivers millions of items quickly and free of charge? Hard to find.
Management has managed to find another advantageous way to monetize all activities on the e-commerce platform. I’m talking about advertising. This may come as a surprise to many, but Amazon generated digital ad revenue of $46.9 billion in 2023, up from $37.7 billion in 2022. Because shoppers visit the site with the intent to buy, Amazon can effectively serve targeted ads.
Amazon acquired MGM Studios for $8.5 billion in 2022 to strengthen its content production capabilities. This has made Prime Video one of the most popular streaming options.According to Nielsen data, this service is only lagging Netflix When it comes to TV viewing time in the US, YouTube
And even though it is the leader of the media; entertainment industry, Walt Disney Disney+ and Hulu’s services trail Prime Video on these engagement metrics. This shows how successful Amazon has been in the streaming industry and given it a new growth engine.
While attracting attention, artificial intelligence (AI) Over the past year or so, investors have likely become familiar with the company’s cloud services division, Amazon Web Services (AWS). AWS accounts for approximately one-third of global industry revenue and has a significant lead over competitors microsoft with azure alphabetGoogle Cloud.
The industry is expected to experience rapid growth over the next decade, and AWS is well-positioned to reap many benefits. The need for enterprises to incorporate his AI capabilities will also help AWS maintain its lead. Due to great performance in Q4 2023 Operating profit margin Reaching 29.6% will increase the overall profitability of the company.
Not a hefty price tag
The stock has outperformed significantly in the past, rising 108% so far in 2023.However, with a price-to-sales (P/S) ratio of 3.2x, the stock does not seem overvalued for future investors at this point.. This is consistent with the situation four years ago when the coronavirus pandemic began. And this is roughly in line with the stock’s average P/S multiple over the past 10 years.
Now is a great time to buy stock in this top company, given that Wall Street analysts are predicting sales and operating income growth of 11.4% and 34.7%, respectively, over the next three years. It’s the time of the year.
Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Neil Patel and his clients have no positions in any stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Netflix, Walmart, and Walt Disney. The Motley Fool recommends the following options: His January 2026 $395 long call on Microsoft and his January 2026 $405 short call on Microsoft. The Motley Fool has a disclosure policy.
