Amazon's second-quarter earnings beat analysts' forecasts. This was driven by a 4.2% year-over-year increase in online retail sales. Amazon stock is up 55% so far this year.
However, the stock still faces a number of challenges. The price is down about 10% from its mid-September high.
Amazon stock has come under pressure in recent weeks as the company faces looming risks from an antitrust lawsuit filed by the Federal Trade Commission (FTC).
However, downside risks are no reason to sell the tech company's securities, and many experts say this is a great time to invest in Amazon. The IT company IBM, for example, has been dealing with legal issues for 13 years.
In a worst-case scenario, the FTC lawsuit could end with the possible breakup of the Amazon giant into several companies, which could level the playing field for smaller competitors.
Selling shares due to a likely breakup of the company could be a lost gain after a long run-up in the stock. Amazon is now valued at $1.3 trillion, but it is reasonable to assume that if it needs to sell assets, the businesses could be worth more than their current combined valuation.
For long-term investors, Amazon could be a lucrative investment for years to come. Even if the company were to break up, it wouldn't be bad news for investors.
Amazon stock is currently trading at $131.83.
Legal battles happen at many large companies, but that doesn't mean antitrust litigation can destroy a company. Whether it's Amazon or any other company, they have large legal teams to handle litigation matters.
As of June 30, 2023, Amazon had $64 billion in cash and marketable securities on its books. This confirms that the company is not ill-prepared for a battle with regulators.
Ultimately, investors should consider any opportunity to buy Amazon stock at a discount because it is a phenomenal company to hold in your portfolio for the long term.
According to analysts at Traders Union, Amazon stock is expected to be worth $193.23 in early 2025, $283.24 in early 2028, and $365.48 in 2030.
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