It has been a good start to the year for Amazon (NASDAQ: AMZN), with the stock up 19.7% year to date through market close on May 7. Except for Alphabet, Amazon has been the best-performing “Magnificent Seven” stock this year.
Given Amazon’s recent run-up — up nearly 27% between April 7 and May 7 — it’s natural to wonder whether it’s a good time to buy the stock or hold off in case of a pullback. If you’re a long-term investor, it’s definitely a good time to buy the stock. It’s a blue chip stock you can comfortably hold for the long haul.
Image source: The Motley Fool.
The future remains bright for the tech giant.
It has been a good start to the year for Amazon (AMZN +0.55%), with the stock up 19.7% year to date through market close on May 7. Except for Alphabet, Amazon has been the best-performing “Magnificent Seven” stock this year.
Given Amazon’s recent run-up — up nearly 27% between April 7 and May 7 — it’s natural to wonder whether it’s a good time to buy the stock or hold off in case of a pullback. If you’re a long-term investor, it’s definitely a good time to buy the stock. It’s a blue chip stock you can comfortably hold for the long haul.
Image source: The Motley Fool.
Despite its dominance and size, Amazon is still well positioned to keep growing impressively over the foreseeable future. Its e-commerce business is becoming more efficient and profitable, which is a turnaround from the historical “just bring in the revenue and AWS will bring in the profit” model.
AWS — Amazon Web Services — remains dominant in the cloud industry, and growth is accelerating again as AI demand picks up and more companies need computing capacity and access to various AI models. AWS is admittedly constrained right now because demand is much higher than it can handle, but Amazon’s $200 billion 2026 capital expenditure plans — most of which will go to data centers and AI infrastructure — should help address that problem.
Amazon
Today’s Change
(0.55%) $1.49
Current Price
$272.66
One of the more overlooked business segments for Amazon is its advertising business. In the first quarter, its revenue increased by 24% year over year and is now at $70 billion over the past 12 months. Amazon has the data and eyeballs to make a valuable advertising platform, which should end up being a lucrative business for Amazon.
No need to overthink it; Amazon is built to be a good investment for quite some time.
