Amazon (AMZN 3.56%) 2022 shares are significantly below the broader market, down nearly 50%. S&P 50019% decrease in The new year got off to a better start, slightly outperforming its first day of trading.
How should investors see it heading into 2023? These charts give investors some clues.
1. Amazon’s market share is unbeatable
Amazon’s core business is still e-commerce, despite entering many new businesses. We host over 200 million Prime accounts, and Prime account growth drives sales and allows us to enter other growth areas.
It accounts for nearly 40% of the total US e-commerce market, with its closest competitor just over 6%. There is no competition here and management continues to develop new solutions and improve services to maintain an unparalleled advantage.
Amazon US e-commerce market share as of June 2022. Image Source: Statista.
Amazon’s e-commerce market share could have reached 50% in 2021 when digital shopping surged and other companies scrambled to expand their online presence. Since then, it has waned as it deals with internal challenges, external headwinds, and the success of other companies in reaching customers online. and can disrupt more areas.
2. E-commerce is still wide open
Amazon holds the top spot in a growing field.
Global retail e-commerce sales from 2016 to 2026. Image Source: Statista.
Indeed, growth has slowed after the explosive growth of the past few years. However, it remains a growth area and will continue to grow in importance as a key component of the customer-focused service industry. Amazon is making moves to extend its dominance. This does not include Amazon Web Services (AWS) or any other business.
3. Sales increase despite challenging macroeconomic conditions
Investors fuss over management’s weak outlook for Q4 2022, largely ignoring that it actually had a very strong third quarter, delivering a 15% year-over-year sales increase. . Sales continue to be strong after the initial ramp-up of the pandemic.
AMZN Earnings (TTM) Data by YCharts
Of course, growth is not linear. As a long-term investor, you shouldn’t expect that. You can’t time the market, but you can look for favorable entry points.
When stocks fall because the market is unsettled by disappointing quarterly earnings forecasts, it might be a good time to buy stock in a great company. With the current subdued price, it looks like a great opportunity to start or add to a position in Amazon stock.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Cybill has no positions in any of the stocks mentioned. The Motley Fool has a position on and recommends Amazon.com. The Motley Fool’s U.S. headquarters has a disclosure policy.
