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Stock market volatility has many investors feeling uneasy. But savvy buyers know short-term uncertainty can create long-term opportunity.
This August, growth leaders Apple and Amazon present compelling cases for investment despite recent stumbles. Their dominant positions, future prospects, and discounted prices relative to past highs make them prime to outperform in the years ahead.
Let’s dive into why these FAANG tech stocks deserve a spot in your portfolio, even amid the bears growling.
Table of Contents:
- Apple’s Temporary Bruises
- Amazon Returning to Form
- Focus on the Future
- Don’t Try to Time the Market
- Take the Long View
- Make a Shopping List
Apple’s Temporary Bruises
Apple just gave investors a fright, tumbling nearly 10% in August after revealing declines across key product segments like iPhones, Macs and iPads last quarter.
But this beast’s wounds are far from fatal.
While Apple felt the sting of the global economic slowdown, its results still beat competitor Samsung to dominate the shrinking smartphone market. Macs and iPads faced tough year-over-year comparisons to pandemic highs.
However, Apple’s services ecosystem continued expanding with 8% growth. This segment’s rising profits and stickiness give Apple stability.
Historical data shows Apple always rebounds stronger. Over the past five years, its revenues climbed 68% and earnings jumped 48%.
Meanwhile, Apple’s stock price surged 242%.
So a 9% drop after one difficult quarter seems like an overreaction. With iPhone 14’s launch approaching, Apple’s primed for rapid recovery.
Amazon Returning to Form
Like Apple, Amazon’s pandemic rocket ride resulted in a huge comedown. Its online retail profits plunged as consumers ventured back outside.
But Amazon’s latest earnings indicate e-commerce has turned the corner. Its North American segment swung from a $627 million loss last year back to $3 billion in profits. International retail improved too.
After two straight positive quarters, it appears Amazon has adapted to the new normal. Its stock has responded in kind, rising 8% since the earnings beat.
At the same time, AWS, Amazon’s cloud services juggernaut, continues excelling by dominating enterprise IT needs. It accounts for all of Amazon’s operating income, demonstrating the strength of this side of the business.
Additionally, Amazon is now aggressively staking its claim in artificial intelligence. The AI space represents a potential $1 trillion market by 2028. Amazon aims to be a leader here too.
With over $500 billion in trailing twelve month revenues and a dominant position in multiple sectors, Amazon has enormous growth runways ahead.
Focus on the Future
Today’s troubles obscure the long horizons for Apple and Amazon. These companies hold some of the world’s strongest brands and balance sheets.
Their temporary setbacks present a discounted buying opportunity. Savvy investors pounce when market leaders falter.
Both companies sit well below their all-time highs. Apple is still 15% under its peak while Amazon remains 34% lower. Their proven leadership indicates they could recapture these valuations in the coming years.
Patience pays.
Don’t Try to Time the Market
Speculating on short-term stock movements often proves futile and costly. No one can predict what headlines will hit next.
Once-high flyers can get grounded for stretches. But companies like Apple and Amazon have the financial fortitude to ride out turbulence until conditions improve.
Their dominant positions in essential, emerging tech sectors signal long-term strength. AI, cloud computing, subscriptions services, and e-commerce will drive growth for decades. Apple and Amazon have placed their stakes.
Buy them for the long haul. Trying to time the ups and downs will drive you crazy.
Take the Long View
The bears will keep making noise and stocks will keep swinging. But disruptive companies forge the future regardless of market cycles.
Apple and Amazon have proven time and again their resilience and their ambition. Their temporary setbacks only put their stocks on sale.
Tune out the daily hysteria. Focus on where these tech titans will be in 5 or 10 years, not next week. The long view reveals rewards for those with patience.
Make a Shopping List
While others get distracted by fear, wise investors create shopping lists.
Apple and Amazon represent compelling opportunities today for those with a long-term mindset and a contrarian instinct. This August, the market’s given a chance to buy them discounted.
Take advantage. One year from now, we’ll have forgotten these temporary dips. But the gains reaped from buying during doubt could pay off for an investment lifetime.
Stay curious and courageous. Volatility creates chance for the prepared mind.
Hopefully this perspective helps steady your resolve. Don’t let the bears scare you away from proven winners. As always, please let me know if you need anything else!
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