- Amazon stock fell 8% on Friday, causing it to crash briefly into a bear market.
- In AMZN’s worst selloff since its October 2023 bottom, investors are likely taking risks off the table.
- I explain why, while profit-taking is justified, the decline seems overstated.
- I detail why Amazon’s deeper forays into advertising and AWS’s resilience help undergird its growth prospects.
- With AMZN down to lows last seen in April 2024, I argue why you should follow my lead and buy its dips without undue fear.
- I am JR research, an opportunistic investor who identifies attractive risk/reward opportunities supported by robust price action to potentially generate alpha well above the S&P 500. I run the investing group Ultimate Growth Investing.
Amazon (NASDAQ:AMZN) investors were likely stunned by the steep selloff that engulfed the stock of the e-commerce leader last week. Its stock fell more than 8% on Friday (August 2), briefly sending AMZN into a bear market (down 20% or more) since its early July 2024 highs. The stunning decline followed a closely-watched earnings report, suggesting investors were discernibly disappointed. In Amazon’s mixed Q2 earnings release, the company also guided below Wall Street’s expectations. Therefore, I assess that the decline to dissolve the heightened optimism heading into its earnings scorecard is justified.
In my previous bullish Amazon article in June 2024, I indicated that a bullish breakout seemed increasingly likely. My thesis panned out as AMZN surged toward the $200 level. However, the bullish momentum has been reversed, given the steep decline over the past three weeks. Despite that, Amazon’s performance in Q2 shows my optimism about the resurgence of Amazon Web Services and deeper forays into advertising played out.
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