Amazon’s Profit Outlook Improves

After falling to a 3-year low in January, Amazon.com (AMZN) rose to a 9-month high last week and is up +51% this year.  Amazon is rebounding from a long stretch of underperformance related to pandemic-era investments and a slowdown in growth following a surge in growth during the pandemic.  The outlook for Amazon has improved as investors are looking for an increase in earnings and growth prospects.

Even with its sharp rally this year, Amazon is still 32% below its July 2021 record high.  Other mega-cap technology stocks have fared better, with Apple (AAPL) and Nvidia (NVDA) trading at all-time highs.  Also, Microsoft (MSFT) is just below its record high, and Alphabet (GOOGL) is less than 18% away from its record.  Centre Asset Management said, “Amazon is the one FANG stock where we have a genuine overweighting, given the combination of a multiple that is well below its prior peaks along with the positive catalyst of margins inflecting higher, which in the past has marked periods of string outperformance.”