The Nasdaq Composite index is in record territory. While that’s exciting news for some, it may be discouraging for people who’ve been on the sidelines.
But don’t let the market’s rise keep you from searching for out compelling investment opportunities. There are still some quality corporations selling at attractive valuations.
For many who’ve got $1,000 you’re ready to invest, then don’t look past Amazon (NASDAQ: AMZN). Here’s why it’s the ultimate word growth stock to buy immediately.
Sizable growth potential
Amazon generated $575 billion in net sales in 2023. That is bigger than the GDP of some countries, like Ireland and Thailand. And it puts Amazon behind only Walmart on the Fortune 500 list.
To be clear, this revenue figure makes Amazon a colossal organization. But investors will be delighted to know that the business still has meaningful opportunities to expand, due to multiple growth tailwinds.
Amazon’s business was built on the expectation of the expansion of online shopping. Today, nearly 40% of all e-commerce spending inside the U.S. happens on its website. There’s still an infinite runway for online activity to take share from brick-and-mortar shopping, which should lift the business inside the years ahead.
The popularity of Amazon Prime membership not only feeds into greater e-commerce sales, nevertheless it could possibly also lead to Prime Video attracting more TV viewing time. Consequently, Amazon also benefits from the streaming trend.
Then there’s digital promoting, a segment that raked in $14.7 billion in revenue just inside the last three months. That total was up 26% 12 months over 12 months. Inside the U.S., Amazon is behind only Alphabet and Meta Platforms inside the industry, something most investors may not realize.
Perhaps essentially essentially the most exciting a component of the equation is the cloud division, Amazon Web Services (AWS). While growth here has slowed in consequence of macro headwinds, the industry-leading segment boasts a Q4 operating margin of 30%. And AWS gives Amazon a serious avenue to introduce artificial intelligence innovations to its client base.
Pay the value
It will not be difficult to steer someone that Amazon is a unbelievable business. The facts speak for themselves. It’s no wonder shares have soared 8,300% inside the last 20 years.
But even at a market cap of virtually $1.9 trillion today, it still makes for a worthy investment candidate. That’s because Amazon shares trade at a price-to-sales multiple of barely below 3.3 immediately. Even after the stock soared 113% because the beginning of 2023, its valuation is about in response to its trailing 10-year average.
Paying that price for Amazon looks just like the fitting move. This business possesses quite a number of competitive advantages that give me confidence in its ability to thrive far into the long term. It has a scale and logistics footprint that rivals cannot match, particularly when it comes to higher serving its customer base.
And far more importantly, Amazon continues to develop its data advantage. There are only a number of corporations that will collect the big amounts of data from its customers like Amazon can. And management can at all times find ways to glean insights that higher drive marketing and product development efforts.
Investors have reason to be far more optimistic, though. After years of aggressive capital expenditures, executives in the meanwhile are focused on making a more efficient organization, cutting costs across the board.
Which suggests that Amazon, which saw its operating income surge 202% in 2023, could see accelerating bottom-line gains. And this will propel the stock even further.
Now looks like a superb time for prospective investors in order so as to add Amazon to their portfolios.
Must you invest $1,000 in Amazon immediately?
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Idiot’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Idiot’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of directors. Neil Patel has no position in any of the stocks mentioned. The Motley Idiot has positions in and recommends Alphabet, Amazon, Meta Platforms, and Walmart. The Motley Idiot has a disclosure policy.
The Ultimate Growth Stock to Buy With $1,000 Right Now was originally published by The Motley Idiot