From Nasdaq: 2024-05-10 05:30:00

Amazon leads the Magnificent Seven stocks as the most undervalued, with a 77% one-year rise in stock price. First-quarter revenue grew 13%, with a 700 basis point expansion in operating margin. Analysts forecast strong growth in e-commerce, digital advertising, and cloud computing, making Amazon a long-term investment opportunity. They see it as gaining market share in each area, particularly in the U.S. where it is expected to account for more than 40% of online retail sales.

Amazon’s momentum in e-commerce has led to a booming digital advertising business. It will account for three-quarters of U.S. retail ad spending this year, outpacing competitors by a significant amount. Amazon Web Services (AWS) is the largest provider of cloud services, uniquely positioned in the AI market. Its investments in AI product development could lead to a surge in cloud services sales growth.

With a current valuation at 3.3 times sales, Amazon presents as a good long-term investment despite being a premium to its three-year average. Analysts project sales growth at 11.1% annually through 2026, leaving room for upside, especially if AWS becomes the go-to cloud provider for AI workloads. Patient investors could see promising returns by investing in Amazon stock.

Amazon is not included in Stock Advisor’s list of top 10 stocks for investors right now, but it has the potential for strong growth. Consider the example of Nvidia, which had significant returns after being recommended by Stock Advisor in 2005. Stock Advisor has a history of outperforming the S&P 500 and providing valuable guidance on stock investment. Consider multiple factors before investing in Amazon or any other stock.



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