3 Reasons to Buy Amazon, and 2 Reasons to Sell in July 2022
Shares of Amazon (NASDAQ: AMZN) are currently down by 34% so far this year. Investors are rightfully concerned about the impact of rising inflation on the company's logistics and labor costs. The company is also facing challenges associated with staff productivity and excess capacity in its fulfillment and transportation network. These headwinds may further intensify in case of an economic recession, since reduced consumer discretionary spending may further pressurize the already low margins of this tech giant's online retail business.
While none of these challenges can be ignored, there remain at least three compelling reasons to view Amazon as a long-term buy, as well as two solid reasons to sell off the stock in July 2022.
Amazon's AWS is the leader in the cloud infrastructure services space and accounted for 33% market share in the first quarter of 2022 (ending March 31, 2022). With enterprises focusing on a cloud-first strategy and shifting their data and resources from on-site networks to hybrid or the public cloud as a long-term strategy, AWS seems well poised to withstand recessionary pressures. This is especially evident when we consider that AWS' robust order book with signed customer contracts was valued at $88.9 billion as of March 31.
Source Fool.com