Amazon’s Robust Performance Despite Market Downturn Amazon’s Robust Performance Despite Market Downturn

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By Ronald Tech

A decade ago, a $10,000 investment in Amazon’s (NASDAQ: AMZN) stock would have multiplied to approximately $76,000 today, illustrating the e-commerce giant’s impressive long-term growth. While Amazon has faced turbulent times, most notably a 50% stock plunge during an economic downturn in 2022, the company has steadily recovered, with a remarkable 80% stock increase since January 2023. Its retail division has exhibited strong growth, and its cloud platform, Amazon Web Services (AWS), stands to benefit from the burgeoning artificial intelligence (AI) market.

A Remarkable Turnaround

In 2023, Amazon experienced a restorative year post-economic downturn. The company undertook significant restructuring to prioritize profitability, which included cost-cutting measures, leading to a strengthening of its business and resilience in the face of future market headwinds.

Amazon’s financial gains were significant, with a 13% year-over-year revenue increase in the third quarter of 2023, surpassing Wall Street estimates by $1.5 billion. Its North American segment also reported over $4 billion in operating income, a substantial improvement from the $412 million losses in the previous period.

AMZN Free Cash Flow Chart
Data by YCharts

Amazon’s free cash flow has soared over the last year, demonstrating its ability to navigate challenging market conditions successfully and solidifying its position as a dependable investment option.

Dominance in Rapidly Expanding Industries

Amazon’s commanding presence in e-commerce, coupled with its leading position in the $65 billion cloud industry, presents numerous growth opportunities. The e-commerce sector is projected to exceed $3 trillion in spending in 2024, with Amazon holding substantial market shares in online retail across multiple countries.

NVDA PS Ratio (Forward) Chart
Data by YCharts. PS Ratio = price-to-sales ratio.

Moreover, Amazon’s forward price-to-sales ratio indicates its stock is offering significant value, combined with a return to profits in the retail business and a strong foothold in AI, making it an attractive investment, particularly during a market downturn.

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Where to Invest $1,000 Right Now

While the past performance is not indicative of future results, the monumental growth in the stocks over time cannot be denied. Amazon is a testament to that unwavering assertion – especially during economic recessions. If given the opportunity, one would be well off following the examples set forth by the aforementioned companies.