2020 has been very volatile and the stock market witnessed over 30% decline along with a rapid recovery and numerous surprises. Despite the tumult, Amazon (NASDAQ: AMZN) is presently 71% higher on an annualized basis from being 9% down in March.
At present, Amazon has a valuation standing at $1.59 trillion and numerous investors have been wondering about the future of the company in the stock market.
AMZN Stock: Up or Down?
The legislative issues regarding antitrust charges against Amazon are the biggest concern. A judiciary committee led by Democrats has concluded that the company has a monopoly in the US. However, it is unknown if the operations of the company will undergo a change regarding the way it sells products in the marketplace.
Amazon might also face some changes in the policies of corporate tax. Nonetheless, Trump’s 21% marginal tax rate is good news for AMZN stock owing to the reinvestment of operational cash for the business. Although if Biden increases this rate of tax to 28%, the company will have less cash for this purpose.
Nevertheless, there are countless catalysts that could sail AMZN stock smoothly through the post-pandemic times.
Firstly, Amazon is the largest e-commerce enterprise with 33% points for the online share of revenue in 2020. Additionally, estimates expected 38.7% for online sales this year and 39.7% next year.
Amazon has been dominating the space of online retail with over 150 million people with Prime memberships on a global scale. Prime charges undercut the price of retailers of Brick-and-mortar stores.
According to estimates, AMZN stock is likely to grow from $229 billion (2019) to approximately $500 billion in 2023.
So, we suggest Amazon as a top buy stock that has its risks but has the ability to turn highly profitable.