It’s not the most affordable stock in the world, and the P/E ratio isn’t low, but Amazon (NASDAQ:AMZN) stock remains the simplest and most direct way to participate in the e-commerce explosion, which continues unabated in 2019.
I don’t see any signs of e-commerce slowing down anytime soon, and on the American stock market, few names are more recognizable than Amazon.
Given the company’s new product offerings and the upward momentum of online shopping generally, I expect the AMZN stock price to pierce the $2,000 resistance level in the near future.
Win the E-commerce War with AMZN Stock
You might prefer to buy things at old-fashioned brick-and-mortar stores, but that’s not the prevailing trend in consumer habits. Goldman Sachs (NYSE:GS) projects an impressive 18% CAGR (compound annual growth rate) for global e-commerce spending from 2018 to 2022; the main drivers will include the unfortunate closure of familiar brick-and-mortar store locations, as well as the strong demand for one-day shipping which Amazon and other online retailers offer nowadays.
It’s truly a global phenomenon as the CAGR for India’s e-commerce sector from 2018 to 2022 could be 22% or even higher than that, while China’s could reach 21%. As I see it, if and when the trade war between the United States and China is finally resolved, online retail sales could grow exponentially — and this would likely be reflected in the Amazon stock price.
And don’t discount India as a major force in e-commerce: while India has slightly fewer people than China (1.37 billion people versus 1.43 billion), it’s highly probable that India’s population will overtake China’s within a few years. Amazon is more than happy to serve India’s growing middle class, as evidenced by the company’s massive upcoming sales push in India, which is scheduled to begin on Sept. 29 and last until Oct. 4 (similar to the American Black Friday sale which nets huge revenues for Amazon each year).
New Products, New Reasons to Invest in Amazon Stock
Innovation is a crucial sign when I’m considering an investment in any company, and Amazon’s kicking it up a notch with a slew of new products to be revealed this week. The full line of products will be unveiled at Amazon’s headquarters in Seattle, so this is a signal event and I’m expecting it to give the AMZN stock price a nice boost.
While the actual products aren’t known as I write this, it’s not difficult to make some educated guesses. For one thing, I’m anticipating serious upgrades for Amazon’s Echo brand smart speakers as well as the company’s Fire TV streaming-content player.
There have also been whispers of enhanced wireless earbuds and perhaps some new home-security products. Heck, we might even see some new content and/or channels in Prime Video — and if you believe that the event will live up to the hype, then the time to buy AMZN stock is before the big reveal, not after.
The Takeaway on Amazon Stock
Like it or not, the shift in consumer habits towards online shopping remains strong and probably won’t abate anytime soon – and that’s good news for AMZN stock investors. Besides, with a number of exciting product upgrades likely to be revealed soon, it’s okay to get caught up in the Amazon hype; as long as the stock continues to outperform, that hype might actually be justified.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.