Congratulations to investors who held Amazon (NASDAQ:AMZN) stock through 2023, as their gains have been phenomenal. However, it’s not the right time to take profits yet. Amazon is expected to continue dominating multiple market niches next year, and there’s still plenty of room for the stock to grow.
While Amazon does face some challenges, particularly legal battles in the U.S. over anti-competitive practices, these issues are unlikely to pose a major problem in the coming year. So, investors shouldn’t miss out on the potential massive gains in Amazon stock in 2024.
Wedbush analysts, led by Scott Devitt, have aptly described AMZN stock as the “everything stock.” Amazon seems to be involved in practically everything, from e-commerce to grocery delivery, healthcare, cloud computing, and more.
The analysts estimate that Amazon is on track to generate $46.5 billion of advertising revenue this year. They believe that Amazon’s advertising opportunity is still in its early stages and that the company is well-positioned to continue gaining a share of global digital advertising spending over the next few years.
Instead of obsessing over price-to-earnings ratios, investors should consider Amazon’s expected growth rate for the coming year. The Wedbush analysts predict that Amazon’s retail margins will continue to rise, and its Amazon Web Services (AWS) cloud business will accelerate against easing comparisons. Additionally, they expect Amazon’s advertising revenue growth to outperform the broader digital advertising industry.
Some bearish traders may worry about Amazon facing pressure from U.S. regulators and lawmakers in 2024. However, the Federal Trade Commission (FTC) is not likely to take action against Amazon in court until May 2026. While the case alleges anti-competitive practices, it presents complex legal and factual issues that require substantial discovery.
Although Amazon is not completely out of the woods legally, it is expected to continue generating massive revenue in 2024 and 2025, most likely without the burden of an ongoing FTC legal case.
While it’s not recommended to invest solely in Amazon, if investors had to choose just one company next year, Amazon is as good a pick as any. The “everything stock” title fits Amazon well, and there’s no need to worry about valuations and U.S. court battles when it comes to AMZN stock, especially in 2024. So, investors can feel confident in grabbing some Amazon shares and holding onto them for a year or longer.
Please note that the opinions expressed in this article are those of the writer and do not reflect the views of InvestorPlace.com.