Should you buy Amazon Stock before the 20 to 1 split? | AMZN Analysis | Tech Stocks to Watch

TL;DR

Amazon's stock price has been volatile, and its financials are heavily reliant on Amazon Web Services (AWS). The company is facing questions about its future growth potential and valuation.

Transcript

check please hey welcome back to everything money this is a highly requested stock obviously it's amazon we all use it every single day we've joked around paul just buy stuff just to throw out just to keep the economy going but we'll talk about the company it's stock price and how they're related we'll look at the financials it's going through a hu... Read More

Key Insights

• 🧡 Amazon's stock price has been fluctuating within a range for over a year, making it more suitable for swing trading rather than long-term investment.
• 🤨 The company's financials heavily rely on AWS, which contributes to its profitability. However, the overreliance on AWS raises questions about future growth prospects.
• ✋ Amazon's high multiples and valuation make it a risky investment, especially considering the entry of other major corporations into the high-margin business.
• ℹ️ The revenue growth estimates for Amazon are impressive, but the sources of this growth remain uncertain.
• 🧡 The stock analyzer tool indicates various price ranges for Amazon's stock, but caution is advised in the current market conditions.
• 🥳 Day trading and swing trading Amazon's stock may be more feasible than long-term investment due to its volatility and potential for quick gains.

Questions & Answers

Q: What does the stock split announcement mean for Amazon?

The stock split does not make the stock cheaper; it only reduces the nominal price. The split is unlikely to impact the stock's value or growth potential.

Q: Why are Amazon's financials heavily reliant on AWS?

AWS is a high-margin business for Amazon, contributing 100% of its operating income. However, there are concerns about the company's overreliance on AWS and the future growth potential of other avenues.

Q: Why is Amazon's valuation a cause for caution?

Amazon's high valuation is based on expectations of sustained growth. However, the company's size and competition from other major corporations entering the high-margin business make this valuation questionable.

Q: What is the future growth potential for Amazon?

The company is projected to experience rapid revenue growth, doubling in size over the next five years. However, the source of this growth remains unclear, raising concerns about the sustainability of the company's success.

Summary & Key Takeaways

• Amazon recently announced a stock split, but this does not mean the stock is cheaper. The company's financials are driven by AWS, while its shipping and selling products operate at a loss.

• Concerns arise over the fact that many people buy from Amazon without realizing the major role AWS plays in driving profits.

• The company's high valuation and multiples raise caution as other major corporations are entering the high-margin business of AWS.