-By: Paul Lin-
With earning reports from Amazon showing slow guidance the stock has taken a sharp 13% decrease over the past week. Where is Amazon headed from here? In my personal opinion, Amazon is due for a steady recovery in the future.
*$AMZN 5 Day Chart
Notes from Amazon’s Q3 Earnings Report and Future Guidance:
- Net sales increased 15% to 127.1 Billion dollars and adjusted for unfavorable impacts due to foreign exchange markets, net sales increased by a margin of 19% compared to last year same quarter
- Expansion into different countries including Belgium allowing for over 1000 Belgian companies to sell their products
- $AMZN expects sales to be $140-148 Billion vs the consensus expected of $155 Billion
Despite these reports and a lower guidance, it is important to remember what makes Amazon such a global conglomerate.
- The business model of the company has not changed and Amazon has continued to invest its profits back into its company and other ventures.
- In addition, Amazon’s development of AWS has taken over the cloud market representing a 32% market share.
Anecdotally, while looking for cloud software engineers all the positions require knowledge of Amazon’s AWS rather than of its competitors indicating the moat that Amazon has.
In all, I expect Amazon to rebound from here with holiday shopping coming up, everyone is logging into their Amazon accounts to get fast and convenient delivery. Beyond that, Amazon’s expansion in different sectors will allow them to continue to increase revenue in upcoming years. Where would we be without Amazon? Of course, it is always to do your own due diligence before investing.