Why I’d buy Amazon shares for 2022

This Fool explains why 2022 will be an incredibly important year for Amazon shares as the company prepares for a future without Jeff Bezos.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Amazon (NASDAQ: AMZN) shares have fallen out of favour with the market recently. Shares in the technology giant have returned just 14% since the middle of November last year, even though revenues are set to increase by more than a third in 2021.

I think I understand why the stock has performed so poorly over the past 12 months.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

The loss of a CEO

Recently, I have read several articles claiming that without Jeff Bezos, Amazon will lack the entrepreneurial spirit that has helped push it forwards over the past two decades. The company’s founder stepped down as CEO at the beginning of July, 27 years after he founded the group

As well as this change, the company has also faced increasing criticism from policymakers about working practices and competition concerns. However, I think the market is spending too much time concentrating on these negatives. 

Indeed, Bezos was only the company’s CEO. The group employs over a million people worldwide, and as it has grown, managers across the business have taken over the day-to-day running of different divisions. These managers will have learnt from the founder. Even though he has left, his experiences and entrepreneurial drive will carry on through these key employees. 

What’s more, Amazon is a much bigger business than it was 20 years ago. It dominates the e-commerce market in many Western markets. This gives it a substantial competitive advantage over peers.

Its investments in cloud computing technology also mean the group has the edge over its peers in this market. The company will not lose these competitive advantages just because its CEO has moved on. 

That brings me to regulatory concerns. Amazon’s massive size means it attracts a lot of negative attention. It is not clear how regulators will act to curb the group’s power ,or if they will at all. As such, I am not going to spend too much time worrying about this unknown factor. 

The outlook for Amazon shares

Next year will be critical for the business as it will be the first without Bezos at the helm. And I think Amazon shares could take off in 2022 as long as the business continues to achieve impressive growth. I think this will prove to the market that the company will not change under the new management. 

I believe the new leadership will also provide further guidance on its future growth and investment plans, setting a course for the company to grow without its visionary founder. This should only help improve the market’s opinion of the enterprise. It should also help investors like myself assess Amazon’s potential and the stock’s valuation. 

Therefore, I would buy Amazon shares for my portfolio today. I think 2022 could be a transformative year for the business, and I would like to own the shares before the rest of the market wakes up to this fact. 

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has recommended Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

man in shirt using computer and smiling while working in the office
Investing Articles

Is Scottish Mortgage Investment Trust now a bargain growth stock?

The Scottish Mortgage Investment Trust share price has plummeted nearly 50% from its 52-week high. Is this a great opportunity…

Read more »

A couple celebrating moving in to a new home
Investing Articles

2 key stock picks for reliable passive income

I’m looking at stocks that can deliver reliable passive income to complement my growth picks, and I think I’ve found…

Read more »

A Rolls-Royce employee works on an engine
Investing Articles

In penny stock territory, is the Rolls-Royce share price set to soar?

The Rolls-Royce share price has sunk recently, falling into penny stock territory. But with flying hours recovering, is it too…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

Lloyds shares drop 20% in 4 months. Should I buy now?

Lloyds shares have lost a fifth of their value since peaking on 17 January this year. But after rebounding from…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

As the stock market recovery stalls, should I wait to buy?

Has the stock market recovery run out of steam? If so, what does that mean for our writer's portfolio? Here…

Read more »

Diagonal chain made of zeros and ones. Cryptocurrency and mining.
Investing Articles

At 55p, is the Argo Blockchain (LON:ARB) share price too cheap to miss?

With a low P/E ratio and strong financial results, could the Bitcoin miner be good value for money?

Read more »

macro shot of computer monitor with FTSE 100 stock market data in trading application
Investing Articles

Here are 2 recession-proof FTSE stocks!

In the face of current economic uncertainty and fears of a looming recession, this Fool identifies two recession-proof FTSE stocks.

Read more »

British Pennies on a Pound Note
Investing Articles

Here is 1 penny stock primed to benefit from the construction boom!

Jabran Khan delves deeper into a penny stock that he believes could benefit from the construction boom, and explains why…

Read more »