Amazon.com’s (AMZN) long-term growth prospects remain strong despite weaker third-quarter guidance

Meridian Funds, managed by ArrowMark Partners, has published its third quarter 2024 investor letter, Meridian Hedged Equity Fund. A copy of the letter can be downloaded here. The Fed’s significant move to cut interest rates helped stabilize the market. During the quarter, the fund gained 6.19% (net), outperforming its benchmark, the S&P 500 Index, which returned 5.89%, and its secondary benchmark, the CBOE S&P 500 Buy/Write Index, which achieved a return of 5.54%. Capital preservation is expected to ultimately play an important role in driving long-term returns during bear markets. Additionally, you can check out the fund’s top 5 holdings to determine the best picks for 2024.

Meridian Hedged Equity Fund highlighted stocks like Amazon.com, Inc. (NASDAQ:AMZN) in its third quarter 2024 investor letter. Amazon.com, Inc. (NASDAQ:AMZN) provides consumer products, advertising and subscription services through online and physical stores operating in North America, International and Amazon Web Services (AWS) segments. Amazon.com, Inc. (NASDAQ:AMZN)’s one-month return was 10.38%, and its shares gained 40.83% of their value over the past 52 weeks. On November 27, 2024, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $205.74 per share with a market cap of $2.163 trillion.

Meridian Hedged Equity Fund disclosed the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its third quarter 2024 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) is a leading e-commerce company that operates a massive online marketplace for third-party sellers, sells its own products and provides cloud infrastructure services through Amazon Web Services (AWS). We own Amazon because we believe AWS and advertising will continue to drive long-term revenue growth and profitability improvements. Although the stock did not perform well this quarter, we attribute this to a mix of near-term factors, including macroeconomic headwinds impacting consumer and business spending, slower retail sales growth and margin expansion falling short of market expectations Retail. Additionally, increased investments in longer-term initiatives such as satellite broadband and other experimental projects are putting further pressure on margins. Despite weaker-than-expected third-quarter guidance, we believe Amazon’s long-term growth story remains strong. We see multiple levers for improving profitability and free cash flow generation over time. We maintained our position in the company during the reporting period.”

A customer enters an internet retail store, illustrating the convenience of online shopping.

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