Congratulations if you held Amazon (NASDAQ:AMZN) stock through 2023, as your gains have been phenomenal. Yet, this isn’t the right time to take profits. Amazon will continue to be a dominant force in multiple market niches next year, and there’s still plenty of room for the stock to run.
This isn’t to suggest that Amazon doesn’t have any challenges to face. Notably, the company will have to deal with legal battles in the U.S. as some legislators accuse Amazon of anti-competitive practices.
On the other hand, Amazon’s legal issues won’t likely pose a major problem in the coming year. So don’t miss out on 2024’s likely massive gains in Amazon stock.
AMZN Stock Is Truly the ‘Everything Stock’
I wish I could take credit for calling AMZN stock the “everything stock.” However, that credit actually goes to Wedbush analysts led by Scott Devitt, who published a report titled “Still Day One For Amazon Ads; The Everything Stock.”
That’s a perfect description of Amazon stock, as the company seems to be involved in practically everything. Beyond e-commerce, Amazon has financial interests in grocery delivery, healthcare, cloud computing and more.
If you think Amazon can’t continue to grow and flourish in 2024, think again. The Wedbush analysts estimated that Amazon is “on pace to generate $46.5 billion of advertising revenue” this year. Furthermore, Devitt and his colleagues posit that Amazon’s “advertising opportunity remains early in its development,” and the company is “well positioned to continue taking share of global digital advertising spending over a multi-year period.”
If you’re busy obsessing over price-to-earnings (P/E) ratios, consider Amazon’s expected growth rate for the coming year. The Wedbush analysts see Amazon’s retail margins continuing to rise, and they envision the company’s Amazon Web Services (AWS) cloud business accelerating “against easing comps.” Moreover, they see Amazon’s advertising revenue growth continuing to “materially outperform the broader digital advertising industry.”
Don’t Fret Over Amazon’s U.S. Legal Issues in 2024
The Wedbush analysts built a strong argument that Amazon can continue to dominate “everything,” or at least multiple industries, next year. On the other hand, some bearish stock traders might worry that Amazon will come under pressure in 2024 due to pressure from U.S. regulators and lawmakers.
Sure, this is an issue to consider for the very long term. However, it’s not a valid reason to give up on Amazon stock in 2024. As it turns out, the Federal Trade Commission (FTC) won’t likely take action in court against Amazon next year or even the following year.
Here’s the scoop. In a joint statement, the FTC indicated that it will be ready to pursue its antitrust trial against Amazon in May of 2026. It’s a major case, as the FTC is alleging that Amazon has engaged in anti-competitive practices.
At the same time, the regulatory entity acknowledged, “This case presents complex legal and factual issues that require substantial discovery.” As the old saying goes, the wheels of government turn slowly.
Certainly, I’m not suggesting that Amazon is out of the woods, legally speaking. I’m only saying that Amazon will continue to rake in massive revenue in 2024 and 2025. Most likely, the company will achieve this without the burden of an ongoing FTC legal case.
Amazon Stock Might Be the Only Stock You Need in 2024
I’m not going to say outright that anyone should just hold Amazon and nothing else. Yet, if you had to invest in just one company next year, Amazon is as good a pick as any.
I didn’t come up with the “everything stock” title for Amazon, but it definitely fits. There’s no need to worry about valuations and U.S. court battles when it comes to AMZN stock, especially in 2024. So, feel free to grab some Amazon shares and just hold them for a year or longer.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
