This fund manager loves Amazon stock

Goodreid Investment Counsel president and chief executive officer Gordon Reid said Amazon (Amazon Stock Quote, Chart, News, Analysts, Financials NASDAQ:AMZN) remains a core long-term holding for the firm, citing its scale, diversification and valuation support.

Speaking on BNN Bloomberg’s Market Call on Dec. 16, Mr. Reid described Amazon as a “cornerstone ownership,” noting the shares trade at roughly 26 times forward earnings, which he views as reasonable given the company’s growth profile and market leadership.

Amazon’s business model rests on what Reid called a “three-legged stool.” Its e-commerce platform has become deeply embedded in daily consumer behavior and now commands roughly 41% of the U.S. e-commerce market, supported by logistics capabilities that continue to improve delivery speed and profitability. He also highlighted Amazon Web Services as the world’s largest cloud provider, with an estimated 30% market share, well ahead of Microsoft and Google, and still growing.

Artificial intelligence represents the third leg of the story and a significant long-term opportunity, in Reid’s view. He said investor concerns about an AI bubble are misplaced, arguing current conditions bear little resemblance to the late-1990s technology cycle.

“I do not believe we are in bubble territory here,” he said, pointing to the maturity of Amazon’s businesses and the tangible cash flow underpinning its investments.

Amazon shares have gained 2.2% over the past 12 months and 36.6% over the past five years. Of the analysts covering the stock, 82 rate it a “Buy,” three a “Hold,” and none a “Sell,” with a consensus price target of US$297.47.

-30-