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Why is Amazon Stock so Cheap?

The company’s not too big to grow.

Andrew Willis 26 August, 2022 | 4:28AM
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Andrew Willis: Amazon (AMZN) rallied after its most recent quarterly results, but there could still be some room to run – and not just in retail.

As senior equity analyst Dan Romanoff puts it, “the secular drift toward e-commerce continues unabated with the company continuing to grind out market share gains despite its size”. This last quarter, the company surpassed our expectations on the retail front, especially with third-party sellers, and we’re also looking out for continued progress in groceries and luxury goods. But the growth story that some investors might be missing is everything that makes these transactions possible.

With a cloud-based infrastructure so big that it doubles as a separate business, valuable advertising opportunities and control of entry through membership, the company can capitalize on its own e-commerce ecosystem. We believe the trifecta of growth at Amazon - AWS, advertising, and subscriptions – is set to outpace e-commerce itself for the next five years.

From Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Amazon.com Inc115.88 USD2.55Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @AndrewWillisCDN.

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