Evercore ISI tech analyst Mark Mahaney has had a Buy rating on Amazon's (AMZN) stock for 15 years, and it's a stance he has no plans to change now that founder Jeff Bezos is no longer running the tech beast.
"I think Amazon [stock] still works for the next 10 to 15 years in part because it faces such a broad array of large markets," Mahaney said on Yahoo Finance Live.
Mahaney says Amazon is still mostly everything he looks for in a good tech investment, something he dives into in his new book Nothing but Net.
The long-time tech analyst — who has had a Buy rating on Google's (GOOG, GOOGL) stock for the past 10 years — points out Amazon has a huge opportunity to expand its market share inside of very large market segments.
Explains Mahaney: "The biggest thing I focus on as an investor day in and day out are TAMs [total addressable markets]. The bigger the TAMs, the bigger the growth opportunity for the company. At the end of the day, what really drives tech stocks is revenue growth. What enables revenue growth is large addressable markets. Amazon still has that, whether it's in retail, cloud computing and the new businesses they are going to get into, like business logistics and business supplies and services. So the company that faces those kind of end-market opportunities, I can think can still be a really powerful long part of an investment portfolio for the next five plus years."
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Goldman Sachs seems to agree with Mahaney in principal. The competing research team said Wednesday Amazon is its top pick for 2022.
That said, the upbeat hot takes on Amazon from the analyst community arrives at an interesting juncture for Amazon. Besides Bezos fading into the background, Amazon is ramping up investments in areas such as same-day delivery to support future growth. In turn, that is likely to weigh on profits in the near-term.
Amazon said in late October that fourth quarter operating income would be in a range of zero to $3 billion, down sharply from $6.9 billion a year ago.
With the cloud of increased investment spending hanging over the financial statements, investors have cooled on Amazon's stock.
Shares of Amazon have largely under-performed the Nasdaq Composite (^IXIC) all year long. The stock is up 12.7% on the year, lagging the Nasdaq's 24% gain.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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