CA - Compared To Historical Levels Amazon's Shares Look Cheap And Are On Sale

2024-06-12 09:00:00 ET

Summary

• Amazon's Q1 earnings beat expectations, with revenue growing 12.5% YoY and EPS exceeding estimates.
• The company is investing in growth opportunities, such as expanding its grocery subscription model and cloud infrastructure.
• Despite risks, including potential antitrust issues and competition, Amazon's financial trends are positive, making it an attractive long-term investment.

On Amazon’s ( AMZN )(AMZN:CA) Q1 earnings call , management was asked a question about their philosophy regarding returning capital to shareholders and investing for future growth. Since then, I have seen more investors discuss the possibility of AMZN following in the footsteps of Alphabet ( GOOGL ) and Meta Platforms ( META ) by implementing a dividend program. Management’s answer was exactly what I had hoped it would be, as they didn’t commit to anything regarding capital allocation, but they made it clear that AMZN would continue to invest in their growth opportunities while eliminating some of their debt load. I love dividends, but that is the last thing I want to see from AMZN at this point. GOOGL and META were at completely different stages of their business cycles, while AMZN is still deploying massive amounts of capital toward its CapEx to compete in the future of cloud infrastructure, A.I., and e-commerce. I have been a long-time AMZN shareholder, and AMZN looks more inexpensive today than almost any time I can remember on a fundamental level. After dissecting the numbers and looking at the momentum in AMZN’s underlying business, I think it’s one of the best buys in the tech industry. I plan on adding to my position when opportunities present themselves, as I want to own more of AMZN. I believe they will be more important to the economy and generate larger amounts of profitability in the future over the next several years than they are today....

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