The S&P 500 took a pounding in the beginning of April, falling 11% within the area of some days. Whereas the benchmark US index has since bounced again by 7.6%, many shares stay properly off their latest highs.

Amazon (NASDAQ: AMZN) is one such instance. Its share price remains to be 23% decrease than it was close to the beginning of February.

Right here, I’ll clarify why I feel the inventory could be on sale for long-term traders.

10 years of unbelievable development

A decade in the past, Amazon was already a juggernaut. It posted income of $107bn in 2015, with its Amazon Internet Providers (AWS) cloud enterprise nearing $10bn in annual gross sales.

The market cap was above $300bn, which might have made it the most important FTSE 100 agency — and nonetheless would by a long way!

Traders again then might need mistakenly assumed that the e-commerce large’s high-growth days had been coming to an finish. Nevertheless, quick ahead to right now, Amazon’s market cap is just below $2trn!

Final 12 months, its income got here in at $638bn, with AWS rising 19% 12 months on 12 months and contributing over $100bn. Extremely, Amazon’s working revenue surged 86%, reaching $68.6bn.

Over the previous 10 years, the share price has risen 885%!

The innovation goes on

The lesson right here is that simply because Amazon is already a juggernaut, it doesn’t imply it will possibly’t continue to grow even bigger over the subsequent 5 to 10 years. Certainly, digesting CEO Andy Jassy’s latest annual letter to shareholders, this appears to be like extraordinarily more likely to me.

The corporate plans to take a position as a lot as $100bn this 12 months, a lot of that constructing out synthetic intelligence (AI) capabilities. Providers like SageMaker, Bedrock, and Nova already assist prospects construct, deploy, and scale AI purposes sooner and extra affordably.

Throughout the agency, there are greater than 1,000 generative AI purposes being constructed. And the brand new Alexa+ is extremely personalised, with contextual reminiscence. It has superior agentic capabilities, which means it will possibly higher navigate the web in a self-directed approach to full extra duties on prospects’ behalf. 

We proceed to consider AI is a once-in-a-lifetime reinvention of every thing we all know, the demand is not like something we’ve seen earlier than.

Amazon CEO Andy Jassy

Amazon can be dedicated to rushing up e-commerce deliveries. In my expertise, that is an space the place there’s already no competitors. As a Prime member, I usually order one thing within the morning and it’s dispatched later that very same day. By means of its Prime Air drone supply service although, it intends to get gadgets to prospects inside an hour.

Elsewhere, its satellite tv for pc community (Venture Kuiper) is concentrating on the 400m-500m households around the globe that don’t have entry to broadband. This service ultimately goals to compete straight with SpaceX’s Starlink.

Enticing valuation

Now, one danger right here is tariffs. Many third-party sellers on Amazon are primarily based in China and lots of US-based ones supply merchandise from Chinese language producers. If sellers begin dramatically rising costs, this might impression development in Amazon’s core retail enterprise.

In the meantime, a US recession would exacerbate these dangers, whereas additionally being problematic for AWS. Nevertheless, the potential for future development by AWS and digital promoting appears to be like very robust.

Primarily based on 2026 forecasts, the inventory is buying and selling at 23.8 occasions ahead earnings. It has hardly ever been so low cost. I feel the rewards far outweigh the dangers for long-term traders.