Amazon Remains Top Pick for Scotia Wealth Management Amid Cloud Computing Boom

Stan Wong, portfolio manager at Scotia Wealth Management, remains optimistic about Amazon's prospects. In an appearance on BNN Bloomberg's Market Call on August 13, Wong named Amazon as one of his top picks due to its strong earnings growth and expanding opportunities in cloud computing and artificial intelligence (AI).

Wong highlighted Amazon's attractive valuation, trading at approximately 28 times forward earnings with a long-term earnings growth rate of about 21%. He noted that few companies can achieve such high growth rates at this scale.

Amazon's growth drivers extend beyond e-commerce, according to Wong. The company is benefiting from the rapid expansion of its Amazon Web Services (AWS) cloud computing platform, which has recently grown by 37%, the fastest pace in about a year and a half. Additionally, Amazon's AI spending is starting to show results through increased cloud growth, broader AI deployment, and improved profitability in logistics and fulfillment.

The stock has performed well over the past year, increasing by 19.66% over the last 12 months and 52.75% over five years. Analysts covering Amazon are overwhelmingly bullish, with 78 rating it 'Buy' and only four recommending a 'Hold', with a consensus target price of $328.95.