Does It Make Sense to Invest in Amazon? Here’s Why You Should (or Shouldn’t)

3 min readAug 7, 2023

Key Takeaways

Amazon’s Q2 earnings revealed its cloud computing platform performed better than anticipated, which is good news for the AI boom
Amazon shares are up 62% in 2023
One big kicker for the stock could be the FTC’s pending antitrust lawsuit against the company in a bid to break up Amazon

Amazon’s second-quarter earnings were the best out of the Big Tech pack, with earnings per share and revenue up. The question is — does Amazon’s share price have room to grow, with some tasty morsels for investors down the line, or is it already at max capacity? We’ve laid out what Amazon has coming up in the near future that could influence the share price. Keep reading.

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The bullish case

At its heart, Amazon is an online shopping platform — and that core business isn’t doing too shabby. In the second quarter, online sales hit $53 billion, up 4% from the same time last year. Amazon’s Prime Day event also surpassed expectations and recorded an estimated $12.7 billion in sales (cost of living crisis, who?).

There are also some new sectors Amazon is looking to break into. One is the digital health market, which is expected to have a market cap of $256.3 billion by 2027, with Amazon Clinic.

The other is Project Kuiper, Amazon’s venture into the nascent satellite internet industry that Elon Musk has so far dominated. Then there’s the groceries business, which is getting an overhaul. All represent potential powerful growth levers for the company.

Amazon also delivered on its latest earnings beat in the areas that mattered. AWS, the company’s cloud services division, beat estimates to hit $22.1 billion in sales, up 12% from the year before. AWS is an important growth driver for the company with the dawn of generative AI, so the long-term growth for this segment is exciting.

Does Amazon stock have room to grow?

Amazon shares have gained 62% since the start of 2023 as the conglomerate has repeatedly impressed Wall Street. The share price is still down around a third from it’s all-time high in 2021, so it’s very possible that the e-commerce giant could climb that peak again and even surpass it.

One potentially major concern is that the Federal Trade Commission (FTC) will level the mother of all antitrust lawsuits against Amazon soon, having already sued the shopping giant numerous times. It’s rumored that the FTC wants to see Amazon split into several separate businesses, but we’re years away from getting a decision.

The bottom line

Amazon is certainly one of the winners this year on the stock market — but, crucially, investors don’t expect the party to end anytime soon. We wouldn’t recommend investing in individual stocks, because the price can fluctuate and you may lose out. Instead, we’d advise using AI as a helping hand in your investment strategy.

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