Is Amazon a Good Investment?

PHOTO CREDIT: Amazon

OVERVIEW

Amazon.com Incorporation is a company based in the United States. The company operates an e-commerce platform around the world. The company also operates a cloud and data center business, where the company offers cloud-based services to large companies like Netflix and many others. The company also operates and sells Amazon Fire TV, Amazon Alexa, Amazon Fresh, Wholefoods and Amazon-branded grocery stores, and many others.

Why You Should?

  1. The COVID-19 pandemic has fueled strong growth for Amazon’s services. Amazon has seen strong growth of its e-commerce platform but has also seen strong growth across other segments, such as AWS and Fire TV. As people stay indoors and as companies around the world transition their operations online. This has benefited Amazon as they report record numbers yet again. This has benefited investors as well.
  2. Amazon has an extremely strong brand recognition around the world. People will continue to shop on Amazon because of fast delivery with a Prime subscription. Furthermore, consumers can expect great user experiences and services through Amazon’s other services, like AWS, Fire TV, Amazon Fresh, and the company’s other operations. This strong brand recognition will also benefit investors.
  3. As I have mentioned before, Amazon offers many products and services to consumers of all kinds. For example, the company offers multi-billion companies like Netflix cloud-based services through its AWS segments. This same company also offers individual consumers streaming TV services and fast package delivery through a Prime subscription. This wide range of products will benefit investors.
  4. The cloud industry and the e-commerce industry are projected for strong growth in the future. Amazon is a large player in both of these industries. These future projections make Amazon a great long-term investment because as these industries continue to grow, Amazon will continue to see rising revenues and profits. As these metrics rise, the stock price will rise as well.
  5. As I have mentioned in the past, Amazon is projected to report stronger and stronger numbers every year. They aim to do this by continuing to grow their core businesses. However, they aim to grow in other segments as well. For example, Amazon will use its capabilities in order to deliver medicines and drugs to a patient’s doorstep. This is one of the ways that Amazon aims to innovate another industry.
  6. Amazon reports some of its strongest numbers during the busy holiday season. As people stay indoors and avoid going to traditional brick-and-mortar to do their holiday shopping, Amazon expects this holiday season to be busier than ever. This busy holiday season will boost financial results for the company. This will also benefit investors.
  7. Due to the reasons mentioned above, the company has reported rising revenues and profits over the past couple of financial years. This will help the company raise funds in order to grow across its many segments and continue to move into different industries. This future growth as well as rising profits will also benefit investors in the company. In the financial year of 2019, the company reported revenues of around 280.5 billion and profits of around 11.59 billion. Both of these metrics are higher than what the company reported in the financial year of 2018 when they reported revenues of around 232.89 billion and profits of around 10.07 billion.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. The only negative thing that I can find about Amazon is tough competition in the industry. Amazon competes with companies like Etsy, Costco, Walmart, InstaCart, IBM, and many other companies. This tough competition might hurt the company’s future growth. This might also hurt investors.

MY OPINION

In my opinion, I think that Amazon is a great long-term investment due to positive impacts from the COVID-19 pandemic, strong brand recognition, a wide range of products and services, its position is growing industries, strong future growth prospects, and rising revenues and profits. However tough competition might hurt the company in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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