Is it worth buying AMZN stock as growth slows down in 2024?

However, since surpassing its all-time high in early April, the price of AMZN stock has stabilized. The current price is around $185 per share, which would mean paying about 52 times the current earnings and about 4 times the revenue for a company that does not pay dividends.

Bullish and bearish investors are likely to have differing opinions on the matter. Bulls argue that there is still room for growth in AMZN stock. Bears are concerned about the slowdown in growth.

Until the company announces its next earnings in two months, bears may have the upper hand. However, does that necessarily mean you should sell?

For Amazon, the second quarter is usually a period of sluggish sales. There are no major holidays in the United States that stimulate shopping. It was known that spending decreases before the summer vacation season.

There are also specific concerns for Amazon. While Amazon Web Services recently welcomed a new CEO, he is a marketing executive. The costs to upgrade AWS for AI are escalating, and it is unclear where the revenue justifying it will come from.

Most of Amazon's business is continually evolving. The changes in logistics are not exciting. Streaming is outdated and does not generate significant profits. It's just part of the daily work.

As a result, the stock price is stable. Stock movements are small and lack direction. Amazon is transitioning from a growth stock to a value stock, but it is still at a stage where the important initial dividends are awaited.

Considering these capital costs, immediate payments are not to be expected.

There is a second issue with Amazon shares, which is,Growing disillusionment with AIby the Dow Jones Industrial Average (Dow), which consists of excellent stocks.

Large language models like ChatGPT provide a brute-force approach to intelligence, with a large amount of data pre-digested.

In many companies, benefits from AI investment have also emerged in the form of operational efficiency.

However, this is not true intelligence. Gathering and analyzing data from factories, hospitals, and delivery networks to provide answers is different from imagining something new, like learning how crows stack cups.

LLMs are ideal for first-level customer service applications. However, if Karen requests to speak with a manager, a manager is still required.

Upgrading operators can reduce costs and potentially lead to staff reductions in some cases. However, personnel to provide services to people are still necessary.

Critical moments will occur in the fourth quarter.

Amazon is expected to announce a new version of the Alexa voice assistant. A monthly fee is expected for the upgrade.

This will be in addition to all the fees for Amazon Prime, ad-free television, Kindle books, music, and other services.

What's even more important is that there is a natural limit to the number of AIs people will subscribe to. Paid Alexa services will help determine how much value consumer AIs offer.

Analysts estimate Amazon's revenue for the current quarter to be around $150 billion, with an annual total of $630 billion. While this represents significant absolute growth, the relative growth is not as substantial.

The key is the profit. The current quarter is expected to range from 78 cents to $1.19 per share. This results in a significant difference in the annual expected earnings per share, ranging from $3.75 to $5.41. Those who own shares will pay between 34 and 49 percent of these profits.