Update on my position in Amazon (AMZN) – Reasons to hold and key risks
I’d like to describe my position in $AMZN, which I entered a year ago at $211 per share. It now represents 2.2% of my portfolio, and the stock currently trades around $245.
Three main reasons why I consider AMZN a good investment:
1. Dominant position in e-commerce: Amazon continues to hold a significant share of the global online retail market, benefiting from network effects, extensive logistics infrastructure and recurring Prime subscriptions that support customer loyalty and steady revenue growth.
2. AWS as a high-margin growth engine: Amazon Web Services remains the market leader in cloud computing, generates significant free cash flow (FCF) and is expanding into areas like artificial intelligence and machine learning, which positions it for sustained high growth in an increasingly digital economy.
3. Diversified revenue streams: Beyond retail and cloud, Amazon also earns revenue from advertising, streaming (Prime Video) and new ventures like healthcare (Amazon Pharmacy) and robotics, which is positive for further innovation and revenue diversification.
Two key risks that could affect the investment:
1. Intense competition: Competitors such as Walmart, Alibaba and Shopify are strengthening in e-commerce and cloud services, which could reduce Amazon's market share and pressure margins through price wars or competitive innovations.
2. Regulatory scrutiny: Ongoing antitrust investigations and potential regulations in the US and EU could lead to fines, forced divestitures or restrictions on business practices. This can increase operating costs and uncertainty.
Why I believe long-term holding of AMZN makes sense:
Amazon has a successful track record of innovation under strong leadership and continuously reinvests in high-growth areas like AI and logistics. Its ecosystem creates durable competitive advantages, and with accelerating globalization the company is well positioned to face challenges in the coming decade. That makes it a key growth position in my portfolio despite short-term volatility.
I plan to add more if the stock drops to around $215, which I see as an attractive entry point for dollar-cost averaging.
Do you hold AMZN? What is your target price or view on its long-term potential versus regulatory risks?
Amazon is 18% of my portfolio. I expect it will grow again :-)
Great! I just don’t know how to interpret competition like WMT, etc. Do they rent out their cloud capacity, or do you mean they aren’t customers of AMZN?
I already have a larger position and I recently bought more. The stock has been trading sideways lately, but that could change this year and the stock could start to rise if everything goes well.