Top-5 reasons to invest in Amazon stock in 2022

Experts estimate that the online shopping segment will continue to grow in the coming years. Amazon stock is an attractive asset for both private investors and large financial companies and investment funds to buy. In this section, we look at five key reasons to buy Amazon stock and add it to your investment portfolio in 2022.

1. International Market Expansion
Amazon is one of the leaders in international online commerce, with a presence in 58 countries. Amazon's international sales in 2021 are growing steadily thanks to the increasing demand for online shopping in developing countries. Amazon's vision includes both vertical growth and horizontal expansion. One element of the group's growth strategy has been to seek out and buy companies with high growth potential for Amazon. Over the course of its operations, the concern has acquired approximately 108 companies in various countries. In 2021, the group included such companies as Umbra 3D, DBBest, Metro-Goldwyn Mayer, Art19, and Wickr. This policy allows not only to increase the trade turnover but also to conquer new markets in related fields and expand the customer base.

2. Diversification strategy
Despite the growing interest in online commerce, an important factor in Amazon's success in international markets has been its investment in the development of modern services and the introduction of new technologies. For investors, portfolio diversification is necessary to control risks and reduce likely losses when the market situation changes.

Amazon Corporation began its activities with the sale of books online. Currently, the company provides a wide range of products and services in different industries. The list of key services includes cloud services, solutions for downloading and listening to music tracks and video content, consumer electronics and "smart" gadgets, food delivery services, platforms for applied computing, and much more. In addition to selling its own products, Amazon operates as a marketplace - online hypermarket sections feature products from millions of merchants, and parcel delivery is available in 58 countries around the world.

Each year the company invested a significant portion of profits in the purchase of promising companies and the introduction of developments in the field of high technology and artificial intelligence. Experts forecast growth of trade turnover and an increase in net profit due to the expansion of sales markets and repeat sales of loyal audiences.

3. Favorable macroeconomic environment
The COVID-19 pandemic has had a significant impact on consumer habits - instead of going to a regular store, the percentage of people shopping online has increased dramatically. Many people have already formed the habit of ordering necessary goods and services online instead of visiting shopping centers. Changing consumer behavior further increases the market share of Amazon and other e-commerce companies.

4. Dominant product lines such as AWS and Amazon Prime
Today, Amazon's AWS leads the cloud computing industry worldwide. Most major companies, such as Netflix and Zoom, use Amazon AWS solutions to provide a seamless service to their customers. Amazon AWS has about a 45% share of the cloud computing market, followed by Microsoft Azure with a 29% share.

Amazon has a significant competitive advantage in the form of Prime subscriptions, which makes it easy to find the right product on demand and entitles the customer to free product delivery. By the end of 2021, about 200 million people in the U.S. and other countries had subscribed to Amazon Prime and become loyal customers of the online hypermarket. This format makes it possible to increase profits through presales and recommendations of related services and services tailored to the interests of customers. The number of users who subscribe to download music, movies, and TV series with a monthly fee is also growing.

Continually increasing the number of subscriptions will help Amazon further strengthen its base in both e-commerce and streaming video-on-demand services.

5. Stock splits - an affordable entry threshold for investors.
In June 2022, Amazon's board of directors' decision to split the stock was implemented. The value of the security was changed by a ratio of 20:1, a share can now be purchased for about $107. Since the last split in 1999, Amazon's securities have risen 4,300%. The management's decision expands opportunities for private investors - individuals without significant start-up capital can now buy Amazon stock and become co-owners of the business.

___________

Also, if you want to use all available trading tools to increase your profits as soon as possible - follow this link below, or contact us via live chat. Our experts will help you to choose the best strategy for success.

Follow our updates for useful information in our series of articles. You can also visit our previous article to better understand this topic.