Avoid Buying “Amazon” Stock At The End Of 2022

amazon warren buffet

Avoid Buying 1 Stock – Amazon

Berkshire Hathaway began divesting Amazon stock in 2019, and it currently accounts for 0.3% of the group’s equity portfolio. The $1 billion stock is equivalent to a 0.1% stake in the e-commerce giant.

These are the biggest names in e-commerce. and a player in cloud computing. No one can even expect Amazon to buy. Possible market in 2023, its business may decline.

amazon warren buffet

Amazon stock price

In the third quarter, company’s revenue rose 14.7% annually to $127.1 billion, missing analysts’ consensus estimates by $370 million. Meanwhile, its operating income fell 48% to $2.5 billion. The most significant hit to Its top line came from its e-commerce business, where international sales fell 5% to $27.2 billion.

With a massive recession looming in 2023, Amazon may be working to earn back those lost sales over the next few years. As of September 30, the company’s free cash flow was negative $26.3 billion, up significantly from the negative $14.7 billion reported in December 2021.

Additionally, company’s Web Services has experienced slow growth over the past year, reporting a 27% year-over-year revenue increase to $20.5 billion in Q3 2022. In contrast, the segment grew 33% in Q2 2022 and 39% in Q3 2021 from a year ago.

As company’s Web Services made up 100% of company’s operating income in Q3 2022, the declining growth is worrying. Considering the additional potential for its e-commerce business to decline in 2023, I’d hold off on buying this Buffett stock for now.

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