- Market overreacted to Amazon’s earnings report, causing shares to drop over 10%.
- Despite sell-off, Amazon had a strong quarter, with revenue and operating income increasing significantly.
- Amazon’s strong balance sheet and growth potential make it a compelling long-term investment opportunity.
Amazon (NASDAQ:AMZN) reported earnings on Thursday after the bell, but the reaction wasn’t good. On top of what some are considering a mixed bag with weak guidance, unemployment jumped to 4.3%, causing fears of a recession to surface again. Many feel the Fed was too late to start the cutting cycle and that it could impact AMZN going forward. Shares of AMZN were lower by more than -10% at one point as they reached $160.55 after closing at $184.07 the day before. I believe this is a massive overreaction, and I purchased shares of AMZN in 2 accounts on the massive dip. While I would love to say that AMZN is getting crushed because of the reported unemployment numbers, they’re not, as shares were selling off hard after earnings came out. There is no way anyone read through the entire report and digested the information before shares started to decline, and I think more than anything, the extent of the declining share price is from trading algorithms being triggered on the way down. Regardless, I am happy to add to my position at $161.50, and it looks to have been a good move, considering shares are back over $167. This is why having dry powder on the sideline is important, as you never know when opportunities will present themselves. Over the past 2 weeks I have added to my positions in Alphabet (GOOGL), Nvidia Corporation (NVDA), AMZN, and Intel Corporation (INTC). I think the market got AMZN wrong, which will prove to be a bump in the road for long-term investors.
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