This is my top-grossing stock to buy right now - NASDAQ

This is my top-grossing stock to buy right now – NASDAQ

aWhen the stock market officially bottoms out into a bear market, investors look for one of their best opportunities to find bargain growth stocks to buy.

rampant inflationSoaring interest rates and extended supply chain issues have combined against companies trying to put their distance from the ongoing effects of the coronavirus pandemic. Growth stocks have been hit particularly hard.

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Where is the wide market Standard & Poor’s 500 The index is down 17% year-to-date Vanguard Growth Index Fund It’s down 28% so far this year. Some of the best performing stocks in 2021, like Bath and body works And strongholdeven worse, dropping by 45% and 38%, respectively.

Although there is still a long way to go for many companies as consumers bounce back from the deteriorating economy, not all stocks will have a hard time. In fact, though (NASDAQ: AMZN) It’s also lost 35% of its value this year so far, and there’s good reason to believe it’s going to thrive, which is why buying it now is the biggest growth stock.

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Tough start to the new year

This may seem inappropriate since Amazon was wiped out over fears of slowing growth. Retail sales in the first quarter fell nearly 2% to $56.5 billion, while operating income fell to $3.7 billion, a 58% decrease. This resulted in a net loss of $3.8 billion, or $7.56 per share.

However, these kinds of headline numbers miss the bigger picture. First, most of Amazon’s losses were from its investment in the electric truck maker Rivian, which suffered a deterioration in its value of more than 65% from its initial public offering (IPO) last year. Also, international E-Commerce Sales are down 6% from the same period last year.

Although those losses are significant, Amazon’s US retail sales, which account for about 60% of total revenue, still enjoyed a 7.5% gain. Amazon Web Services (AWS), its cloud computing subsidiary, saw revenue increase 37% from last year to $18.4 billion, while operating profit rose significantly, jumping 57% to $6.5 billion.

These numbers show that while Amazon is not completely immune to the broader economic forces affecting the retail industry, its operations remain strong otherwise.

Facing rising costs

Amazon has taken a number of initiatives to boost its business, such as raising the price of its basic member loyalty program from $119 to $139 a year and charging a 5% fuel surcharge for independent sellers on its site. Completion costs jumped 23% year over year to more than $20 billion, even though that came as the e-commerce giant Her achievement network doubled in size In 24 months.

However, she says she has spare capacity now. Despite contributing $2 billion in additional costs compared to last year, it gives the company the ability to grow its business at the capacity it now has.

Moreover, Amazon Chief Financial Officer Brian Olsavsky told analysts the retailer “doesn’t see a softer” in consumer demand even as it monitors the impact of inflation on consumer budgets.

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Head to the cloud

Of course, more important is Amazon’s cloud business, which has long been the profit center of its operations. as such Companies continue to migrate their operations and data to the cloud, AWS should continue to grow at the hot rate it used to, even as more competitors enter the space.

“We are still close to the beginning of the public transition to the cloud,” Adam Selipsky, CEO of Amazon for AWS, said. financial times earlier this year. Only about 5% to 15% of companies have moved their IT workloads from on-premises data centers to cloud infrastructure networks.

He expects almost everyone to make the transition eventually to the cloudwhether to amazon, MicrosoftAzure or the alphabetGoogle Cloud.

It’s time to work

Amazon prepares for Divide her inventory from 20 to 1. At current prices, that would put the stock at around $110 per share, a more favorable price to attract retail investors. Although the split changes nothing about the company’s fundamentals, it is still seen as a bullish sign by the market.

Wall Street expects Amazon to grow its dividend by 40% annually over the next five years, and with the stock down 45% from an all-time high, it looks like a great time to pick up this top-grossing stock.

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John Mackie, CEO of Whole Foods Market, an Amazon company, is a member of The Motley Fool’s Board of Directors. Susan Fry, CEO of Alphabet, is on the board of The Motley Fool. Rich Dupre He has no position in any of the mentioned shares. Motley Fool has and recommends positions at Alphabet (A), Alphabet (C), Amazon, Microsoft and Vanguard Growth ETF. Motley Fool owns a file Disclosure Policy.

The opinions and opinions expressed here are those of the author and do not necessarily reflect the views and opinions of Nasdaq, Inc.

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