TL;DR

Amazon's strong performance during the pandemic and its recent stock split have made it an attractive option for investors. Here are seven reasons to consider buying Amazon stock.

Key Takeaways

• Amazon's stock split allows new investors to buy shares at a lower price.
• Jeff Bezos's leadership has significantly shaped Amazon's success.
• E-commerce continues to grow globally, benefiting Amazon.
• Amazon's diverse business ventures extend beyond e-commerce.
• The company's fulfillment network creates a competitive advantage.
• Online shopping trends favor Amazon's growth.
• Amazon Prime membership is rapidly increasing, driving sales.

Why Invest in Amazon?

Investing in Amazon is often seen as investing in one of the most successful businessmen, Jeff Bezos. Bezos founded Amazon in 1994 and has transformed it into a leading global company. His significant stake in the company motivates him to enhance stock value over time.

Growth of Online Shopping

Amazon's international business is set to benefit from the increasing trend of online shopping. E-commerce sales accounted for 14.1% of all retail sales worldwide in 2019 and are projected to reach 22% in 2022.

Amazon's Diverse Business Model

Beyond e-commerce, Amazon is expanding into smart-home technology with Alexa and healthcare through its online pharmacy, PillPack. The company is also increasing its advertising revenue and private-label offerings.

Amazon's Competitive Edge

As the largest online retailer globally, Amazon's extensive fulfillment network provides a significant competitive advantage. With 170 fulfillment centers in the U.S. and plans for more, replicating this infrastructure would be costly and time-consuming for competitors.

Trends in U.S. Online Sales

Online shopping is increasingly preferred by Americans, with e-commerce sales accounting for 11.4% of U.S. retail sales in Q4 2019. This trend indicates substantial growth potential for Amazon.

Long-Term Benefits from the Pandemic

The pandemic has likely increased Amazon's long-term customer base, as many new Prime members have joined for faster delivery options. This shift may lead to sustained online shopping habits post-pandemic.

Growth of Amazon Prime Membership

Amazon reported over 150 million Prime members worldwide in January, up from 100 million in 2018. Prime members tend to spend significantly more than non-members, enhancing Amazon's revenue.

Conclusion

Financial analysts largely recommend investing in Amazon, with 48 out of 50 suggesting a buy. If you're ready to invest, log into your brokerage account and consider purchasing Amazon shares (AMZN).

For those new to investing, consider registering with our featured brokers.