Amazon stock has outperformed S&P 500, but growth is slowing, making it pricey

From Nasdaq: 2024-06-02 06:20:00

Amazon’s stock has outperformed the S&P 500 this year, rising by 19%. However, its growth rate has slowed, with revenue increasing by 13% in the first quarter. Analysts expect growth to further slow to 7-11%. The stock is trading at over 50 times earnings, making it pricey for investors.

Investors may want to wait before buying Amazon stock, as the high valuation and modest growth put the stock at risk of a sell-off. There are better growth stocks available, and unless you plan to hold onto Amazon for a long time, it may be wise to wait until the valuation drops to around 40 times earnings or less.

Before investing $1,000 in Amazon, consider other options. The Motley Fool Stock Advisor team has identified 10 stocks with potential for high returns, none of which are Amazon. The Stock Advisor service has significantly outperformed the S&P 500 since 2002, providing investors with a blueprint for success.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Jagielski has no position in any stocks mentioned. The Motley Fool has positions in and recommends Amazon.



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