When is the best time to buy Amazon stock? Historical stock movements around recent splits can be helpful to find out if Amazon is doing well or not. The company’s first-quarter earnings release is on April 28.
The e-commerce headwinds are likely to continue.
Many challenges to Amazon will likely continue in 2022. Labor was a challenge. Due to the effects of the Pandemic, hiring was very tight last year. The company absorbed billions of dollars in additional operating costs through increased wages, sign-on bonuses, and COVID-19 mitigation measures.
This is the nature of a large corporation with hundreds of thousands of employees. The good news is that the company did not shy away from this investment or attempt to cut staffing or salaries in order to get out of a bind. Future dividends could be paid by investing in employees.
Major issues for the e-commerce giant were presented by supply chain challenges tied to ongoing coronaviruses. Logistical delays and dilemmas added more costs to Amazon’s bottom line. Net operating losses were posted by the company’s North American and international segments despite rising net sales.
The macroeconomic headwinds are likely to continue in 2022. Amazon has a couple of things up its sleeve.
The image is from the same source.
Advertising and the cloud shine.
Amazon’s diverse mix of businesses has been the company’s saving grace when dealing with these problems.
Amazon Web Services has carried the day and still has a runway. The cloud computing market is growing due to increased adoption. Net sales for the year were $62.2 billion, a 37% increase over the previous year. As of the fourth quarter of the year, Amazon had a 33% market share.
Digital advertising has grown to be a force, so much so that Amazon broke out the numbers in more detail during a recent earnings report. Advertising service sales increased by 141% in the year 2019. This is a revenue stream to watch.
Is it better to buy before or after a stock split?
Since the split was announced, Amazon stock has gained over 10%. The chart shows a positive effect on shares. Earnings could be a factor in the lead-up to the June split.
The data is from YCharts.
Recent examples of how recent splits impacted the stock prices of other major tech companies will offer helpful indicators to inform investor timing. Both Apple andTesla had stock splits in 2020. These are very similar to Amazon as they both have a large following of retail investors.
YCharts has TSLA data. S is the split date.
As seen in the chart above, Apple andTesla stock gained in the days leading up to the split date. The pattern is clear, but the rise ofTesla was much more pronounced. This doesn’t mean that Amazon will follow the same pattern.
There are factors that could outweigh the emotional trading surrounding the split. Even in the stock market, history tends to repeat itself. Patient investors are rewarded.
10 stocks are better than Amazon.
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