In the last week, Nasdaq’s ETF (QQQ) barely moved, while Amazon (AMZN) and Tesla (TSLA) both fell. Both high-flying, expensive stocks could reward investors.
Amazon is preparing to cut staff levels. It is adjusting for a slow Q4/22 sales season on its site. After Walmart (WMT) rebounded, proving its physical stores can attract customers, Amazon’s business model is less solid. The firm will need to optimize its online store to increase return visitors. It needs consumers to buy more items per order, increasing Amazon’s operating margins.
Amazon plans to continue cutting jobs in 2023. The lower costs and flat revenue growth will lift its profits.
Electric vehicle giant Tesla broke down from the long-term $200 support level The stock lost 8.05% for the week ended Nov. 18, 2022. Shareholders are growing increasingly concerned that CEO Elon Musk will become increasingly distracted.
Twitter is taking more time than Musk expected. This could hurt Tesla as the global economy slows down. The CEO will need to introduce new products, which raises research and development costs. Higher competition in the EV market will pressure Tesla to cut prices. This will hurt Tesla’s margin and its share price.
Amazon is more diversified and has a better business model compared to Tesla.
