Amazon performance in stock market has always been an upward trend. Last year, the company soared with a 44% jump as investors rushed towards companies that heavily bet on artificial intelligence (AI).
But with economic uncertainty looming, questions remain if Amazon can withstand a potential recession. A look at its past performance offers some clues.
Amazon’s Track Record in Recessions
The selling giant has weathered many economic slumps, including the 2001 Dot Bomb, the big recession of 2007 to 2009
and just the short lived COVID-19 recession in 2020. In each case. Amazon’s stock initially dip sharply but recoup quickly as conditions improve. Seeing that pattern repeat means that while Amazon reacts to slowdowns, it bounces back well and keeps advancing.
However, today’s the company is far different from what it was decades ago. Originally an online bookstore but has grown into a global e-commerce and cloud computing giant. This development of the company brings along both good and bad sides.
While amazon now has the financial strength to bear through economic downturns, its intricate setup makes it more vulnerable to inflation and disruptions in supply chains.
Recent Stock performance also shows this volatility. Over the past month, Amazon stock suffered a big miss, down 14.93% and year-to-date (YTD), it has declined by 12.11%.
After soaring shortly to $229.15 in February, but have trended downwards steadily, to the current level of $192.82 as of mid-March.
This recent sharp drop signals current market anxieties, but Amazon has long term bright prospects as well.
Strategic Adaptations Strengthen Amazon’s Position
Recent challenges, including rising inflation, have tested its resilience. In response, it has taken measures to restructure its operations, cutting jobs and realigning towards regional fulfillment to enhance efficiency. Through these cost cutting steps Amazon is able to maintain profitability as well and position itself for future growth.
Given its stellar history and recent pattern of recovery along with strategic moves, the organization looks quite ready to weather future recessions. Of course, short term selloffs are possible, buy Amazon for the long haul, a solid bet when uncertainty reigns economically.
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