Amazon stock is seeing a potential rise with Cathie Wood's involvement. Should you consider jumping aboard?
Amazon, the tech giant with a market cap of around $2.3 trillion, is preparing to announce its Q3 2021 earnings on October 31. The anticipation surrounding the announcement has led to a discussion about the company's growth prospects and the impact of recent investments in artificial intelligence (AI) and infrastructure.
Analysts expect strong results, with average estimates suggesting a 10-13% increase in revenue. However, the growth of Amazon Web Services (AWS), its cloud division, is expected to show slower growth due to competitive market challenges and uncertainties around AI investments. This cautious near-term outlook is reflected in Amazon's Q3 2021 guidance, which shows revenue growth and profit expectations slightly below analyst consensus [2][3].
Despite these near-term challenges, the long-term forecasts for Amazon remain optimistic. Projections suggest significant revenue and profit growth by 2030, driven by AWS, e-commerce, and advertising [1]. Amazon's advertising segment and e-commerce investments continue to offer profitable growth drivers, despite the near-term challenges.
Investor Cathie Wood, known for her growth investing approach, bought over 76,000 shares of Amazon on October 8 and nearly 21,000 more shares on October 21. While these purchases are often seen as a bullish signal by some investors, specific details on her Q3 2021 Amazon trades were not found in the results.
The outlook for the full year is also very promising. Analysts and advisory services, such as BÖRSE ONLINE, view Amazon as a good investment due to its long-term attractiveness in e-commerce, cloud services, and AI [5]. Most analysts (77) recommend buying Amazon stock, with only five suggesting holding and none advising selling [4]. The average price target is $220, implying around 20% upside, despite the stock already being up 26% year-to-date.
However, it's important to note that Amazon's stock has reacted negatively to near-term concerns. Therefore, when considering investing in Amazon ahead of its Q3 2021 earnings, it's crucial to weigh the short-term cautious outlook and tough competition against Amazon's strong growth fundamentals. Always consider your investment horizon, risk tolerance, and consult multiple sources for the latest analyses before acting.
In conclusion, while Amazon's Q3 2021 guidance reflects a cautious near-term outlook due to investment in AI and infrastructure and competitive cloud market challenges, the long-term forecasts remain optimistic. With the stock currently cheaper than in recent years and the outlook for the full year promising, investors may want to consider Amazon as a potential long-term growth investment.
Investment in technology, particularly Amazon's investments in artificial intelligence (AI) and infrastructure, has led to a cautious near-term outlook, as the growth of its cloud division, Amazon Web Services (AWS), is expected to show slower growth.
Despite these challenges, Cathie Wood, known for her growth investing approach, has recently purchased additional shares of Amazon, exhibiting a bullish sentiment towards the company's long-term growth prospects.
