Given that the stock market just had its worst start to the year in 50 years, it might seem counterintuitive to think about buying stocks right now. But tough market times are actually a great time to buy stocks of amazing companies that could make great long-term investments, like the next 20 years.
While $5,000 is a substantial sum, if you have that amount available to invest right now, which means you won’t need it to pay daily bills or anything else for the next five years or more, divide it evenly between amazon (amzn 3.53%), roku (roku 3.82%) and airbnb (abnb 3.75%) could be a good way to use it with each share trading around $100 a share you could end up with about 16 shares of each.
Reading: Whats the next amazon stock
1. amazon
Amazon has not been immune to the current problems with supply chains and rising costs. Some investors dumped the stock after the company recently reported its first quarterly loss since 2015, but I think there are reasons to buy Amazon stock right now. The tech titan remains a leader in e-commerce and cloud computing, two markets that are getting bigger by the day.
E-commerce accounts for the majority of amazon’s sales, yet the market is still very young. ecommerce sales in the usa uu. they represent only 14% of total retail sales. That leaves plenty of room for Amazon’s business to gain more traction.
amazon has done a fantastic job of bringing people into their e-commerce ecosystem using their prime membership. As of March 2021 (the latest data from Amazon), there were over 200 million top members worldwide. And with the company continually adding new value to Prime, there’s more reason than ever for members to stick around and keep paying the rate.
Just as important as e-commerce is driving Amazon sales, however, it’s the cloud computing business, Amazon Web Services (aws), where the real money is made. aws generated $6.5 billion in operating income in the most recent quarter, up 58% from the prior year.
The great thing about aws is that it owns 33% of the cloud infrastructure market and has stayed ahead of its competitors for years as cloud infrastructure spending continues to grow.
and as companies continue to invest more in their cloud infrastructure, you can bet amazon will continue to benefit from this lucrative market.
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Amazon is trading at around $115 per share. Putting a third of $5,000 on this stock at that price would give you about 15 shares.
2. roku
roku quickly became a gaming pandemic during 2020, when binge-watching suddenly became everyone’s hobby. But initial investor enthusiasm fizzled out amid a huge tech sell-off. As a result, Roku stock is down a staggering 79% in the last 12 months.
But that drop has opened up an opportunity for investors who have a much longer investment time frame than those who are focused on the coming months.
Consider that 85% of the us. Households already have at least one streaming service right now, and are increasingly subscribing to new services through over-the-top (OTT) aggregators like Roku. roku makes money from its users when they sign up for a new service, whether it’s disney+, hulu, netflix or another service.
The streaming platform allows users to stream almost any service and has already convinced 61.3 million people to use its platform.
but roku’s opportunity doesn’t end there. the company is also selling an increasing number of ads on its platform. In the first quarter, the top 10 broadcast TV advertisers increased their ad spend with Roku by 80% over the same period a year ago. The company is tapping into the fast-growing ad streaming market, which is expected to hit $49 billion this year, more than doubling its size just two years ago.
The combination of its platform sales and ad business helped roku grow revenue 28% in the most recent quarter and increased average revenue per user (arpu) 34% year over year to $42, 91.
There’s no guarantee of future growth, of course, but in the coming years, expect more people to abandon cable and satellite services for streaming. And while they do, a lot of them will probably use Roku’s platform, which is no longer. 1 in usa USA, Canada and Mexico.
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Roku shares are selling for around $94 per share. Putting a third of $5,000 on this stock at that price would give you about 18 shares.
3. airbnb
Airbnb shares have taken it badly over the past year, falling around 37%. Given that big drop, one could assume that the company was still reeling from the effects of the pandemic restrictions. But many of Airbnb’s most important metrics have recently rebounded.
Consider that the company’s first quarter 2022 sales of $1.5 billion were up 80% compared to the comparable quarter of 2019, exceeding pre-pandemic levels. and the number of gross nights booked is also picking up, jumping 32% during that same period.
The company’s booked nights and experiences metric also surpassed pre-Covid-19 figures, surpassing 100 million for the first time.
In a nutshell, airbnb’s latest quarterly results show that the uptick in travel that management predicted last year has occurred, with travelers booking longer stays than ever before and once again venturing into large cities and across country borders.
But despite this growth, investors have shunned stocks. the shares are currently trading at a significant discount compared to their IPO price in December 2020.
However, this decline has more to do with negative investor sentiment for the stock market in general than a reaction to company performance. And when the market finally recovers, and history tells us it always does, Airbnb’s unique booking platform and stellar growth could prove to be a great long-term investment.
Airbnb shares are trading at around $95 per share. Putting a third of $5,000 on this stock at that price would give you about 17 shares.
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