Global stocks have risen sharply in the aftermath of the major equities sell-off. None more so than the tech titans listed in the NASDAQ 100. The tech-heavy index smashed its all-time high back in early June and has been climbing steadily since. One company that has spearheaded the charge upwards is Amazon (NASDAQ: AMZN), whose shares are now up 65% since the beginning of 2020.
Meteoric share price gains in the US stock market
Since flotation in 1997, the Amazon share price has grown by an annualised rate of approximately 33% per year. Over the last five years alone, the company’s valuation has rocketed by 492%!
Compared to the gains made by blue-chips listed in the FTSE 100, Amazon’s blows them out of the water. What’s more, it isn’t the only US firm that has grown exponentially over recent years. Think of other companies such as Tesla, Apple, Microsoft, and Alphabet.
The exceptional performance of these US-listed companies illustrates why UK investors would do well to get in on the action. After all, US firms account for over half of the global stock market. Consequently, it would be foolish to ignore the multitude of well-established businesses that dominate their respective sectors. Additionally, investing in US shares helps diversify your holdings away from a heavy reliance on UK-based companies.
Amazon’s market dominance
Speaking of dominating industries, Amazon is perhaps the perfect example. A truly global company, it has successfully cemented itself in each of the business areas it operates in. Its diverse revenue streams are unmatched among international large-caps and opportunities for further growth abound.
With Amazon’s much anticipated second quarter earnings release imminent, investors are watching closely. Although if first-quarter results are anything to go by, I expect it to be an equally positive update, given the wider circumstances. Thus far, Amazon has navigated through the period of the pandemic relatively well. Net sales and operating cash flow increased by 26% and 16% respectively, while net income decreased by $1.1bn compared to the first quarter of 2019.
The best US share for UK investors to buy now
Amazon shares now trade at around $3,138, which is far more than any stock listed on the London Stock Exchange. However, thanks to the development of fractional shares, it’s possible for investors to buy a portion of the stock for less. This means there’s no need to miss out if you only intend to invest a small amount.
Looking to traditional valuation metrics isn’t really useful when it comes to evaluating companies like Amazon. This is largely due to the way the technology sector functions. So, when you hear of Amazon’s P/E ratio being above the 150 mark, I wouldn’t worry too much, especially given that eight years ago, it was a staggering 3,633. So long as you’re in it for the long haul, I reckon Amazon shares offer great value, even at today’s price.
Ultimately, I expect the company to continue pressing on with earnings growth as operations continue to expand. Given the underlying business’s outstanding performance and exciting e-commerce and cloud computing opportunities, I think Amazon is the best US share for UK investors to buy right now. Moreover, with some analysts expecting the shares to climb to $3,800 within 12 months, now could be the perfect time to buy in.
