Summary
- It may be easy to miss, but Amazon.com, Inc. stock has doubled over the past year.
- The company has shown resilient revenue growth and impressive margin expansion.
- Wall Street continues to overlook the dominant positioning of e-commerce operations, which is arguably the best business in the world.
- I rate Amazon stock a buy as I continue to see an attractive upside relative to the risk.
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Amazon.com, Inc. (NASDAQ:AMZN) seemingly does not get as much attention as other mega-cap tech names recently, due to avoiding the extremes on both fundamental performance and valuation. AMZN is not the cheapest mega-cap name, especially based on near-term financial metrics, and is seeing more moderate top-line growth courtesy of its large revenue base.
Yet investors should not ignore AMZN, as it remains arguably one of the strongest business models in the world with a competitive advantage that continues to grow with every dollar reinvested back in the business. AMZN might not offer a direct upside to generative AI hype, but the company has shown that it can boost profit margins at will, and this should lead to long-term multiple expansion. I rate the stock Buy on the attractive risk-reward proposition.
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