Up Just 2% and Still Dominant: Is Amazon the 1 Growth Stock Worth Buying Right Now?
2026-08-03 08:02
•Lawrence Rothman, Cfa •The Motley Fool
•••••• •••••• Axe Cap view
Amazon’s Steady Climb: Worth Watching from a Rand Perspective
Amazon’s modest recent gains mask strong cloud dominance and a more reasonable valuation.
Amazon’s stock may look sleepy with a 2.5% rise over three months, but that’s masking some powerful structural advantages. AWS still dominates cloud infrastructure with nearly 30% market share and nearly 37% annual growth. This is no small feat when competitors like Microsoft and Google are chasing hard. For South African investors, the key lens is valuation and currency impact. Amazon’s price-to-earnings ratio dropping to 22 from 35 signals greater value, especially when paired with a stable dollar-rand rate. Higher capital spending for data centers might spook some, but it feels like investing for long-term growth rather than squandering cash. Prosus and Naspers mirror parts of this growth story but remain more volatile. The risk? A sudden downgrade in US tech spending or dollar weakness could compress margins and dampen returns for rand-based investors. Still, with JSE tech proxies fraught, Amazon looks worth a cautious place in our watchlist. this is just our opinion and not financial advice
Wait for a slight pullback in USD/ZAR or a dip in Amazon's shares to add modestly, using it as a hedge against local tech volatility. Avoid heavy exposure until the currency stabilizes further.
- AMZN
- USD/ZAR
- Naspers
- US tech spending slowdowns
- rand depreciation impacting returns
6/10
Amazon's stock has underperformed the broader market with only 2.5% gains over three months, but the article argues it presents a compelling buying opportunity. The company maintains dominant positions in e-commerce and cloud computing (AWS), with AWS growing 36.8% year-over-year. Despite investor concerns about $220 billion in capital expenditures, Amazon's valuation has become attractive with a P/E ratio of 22, down from 35 a year ago and well below its five-year median of 50.
Our take is based on reporting first published by The Motley Fool.
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