Tech stocks have taken a major hit in the last 3 months. In this period, Amazon has dropped from over $2000 a share to its current price of $1500. However, in spite of this correction, Amazon.com, Inc. (NASDAQ:AMZN) fundamentals remain strong. Amazon is making investments that guarantee it of growth, even if the stock markets were to enter into a recession due to macro-economic factors such as rising interest rates, and the trade war between the U.S and China. One of Amazon’s biggest value drivers is the Amazon Web Services (AWS). Amazon is expanding on this front, to tap into the fast growing robotics market.
Today, the company has announced the launch of AWS Robomaker, whose goal is to facilitate developers in creating robotic applications on Amazon. For instance, it gives developers the advantage of scale in developing robotics applications. It also gives them the platform to test such applications before deployment. The AWS RoboMaker is designed to leverage on open source robotics framework and is connected to Amazon cloud service. With the AWS RoboMaker, robots will be in a position to stream data and learn on the go. This makes it perfect for the development of robotic applications aimed at high tech industries, where intelligent robots that can learn from their environments are a necessity in order to maximize on operational efficiency.
The robotics market is poised for exponential growth, and will be a key driver to the value of Amazon in the long-run. According to Mordor Intelligence, the robotics market is expected to give a compound annual growth rate of 24.52% between 2018 and 2023. Given the competitive advantage that Amazon has in the tech industry, AWS RoboMaker could give Amazon a significant percentage of the revenues of the global robotics market, and drive up its intrinsic value.
Amazon’s growth is also anchored on its dominant position in the e-commerce market. At this point, Amazon is the most dominant player in the ecommerce market, and accounts for over 49% of all online sales. Given than online sales are on a growth trajectory, Amazon’s dominance in this market will be a major driver to its value going into the next decade. These fundamentals will be a key anchor to its growth, and may give it price stability even in a down market.
More short-term, Amazon’s stock is up by over 2%. This could be driven by the relative stability in U.S stocks at Friday’s market close. With the latest news of the AWS RoboMaker, Amazon could open the day higher in Monday trading, once the U.S markets open. This could be supported by the fact that Amazon (AMZN) has already retraced significantly, and could draw in speculators looking to capitalize on its recent drop. Whether it picks traction in the day or later along, Amazon (AMZN) is an interesting stock to keep an eye on, both now and in the future. Its fundamentals are unrivalled, and it’s constantly investing to further drive up growth.