To The Moon

Those who count Amazon out might ultimately regret it. Growth-oriented tech stocks have taken it on the chin lately, and even some of the most prominent of the bunch haven't escaped unscathed. That includes the tech giants typically referred to by the acronym "FAANG." This group includesMeta Platforms -- Facebook's parent company --Apple,Amazon(AMZN-0.98%),Netflix, andAlphabet, which runs the search engine Google. While all five of these companies may be solid investments, I see Amazon as one of the better options among them. Even though shares of the e-commerce giant are down by 46% year to date, it remains an excellent stock to buy for investors looking to outperform the market. Let's consider why. AMZNdata byYCharts It has been a rough year for Amazon Before discussing what makes Amazon a great long-term investment, it's essential to look into the issues plaguing the company this year. In a few words, it's the economy. Due to inflation, Amazon's e-commerce business is suffering from higher expenses and costs. And since price increases also affect consumers, many are spending less than they otherwise would, squeezing the tech giant's operating income. These issues are also impacting Amazon's otherwise high-flying cloud unit, Amazon Web Services (AWS). The company reported that many businesses are rethinking their spending, which sometimes leads them to scale back their cloud-related expenses. Amazon is feeling the effect of these dynamics. In the third quarter, the company's total net sales jumped by 15% year over year to $127.1 billion. That's a higher revenue growth rate than Amazon recorded earlier this year, but, historically, it's much lower than what investors are generally used to. AMZN Revenue (Quarterly YoY Growth)data byYCharts Amazon's operating income came in at $2.5 billion, a decrease of about 48% year over year. Notably, the company's North America and international segments saw operating losses, with only AWS being in the green for the period in this department. Amazon's net income came in at $2.9 billion, down from the $3.2 billion reported in the prior-year quarter. Naturally, Amazon isn't sitting on its laurels. The company is looking to implement various cost-cutting measures, including a hiring freeze in some departments and scaling back spending in some of its units. Still, despite these efforts, Amazon could continue to see troubles in the near term. The economy is still in a rough spot, inflation is still relatively high, and a recession could be on its way next year. But let's turn to why none of that should matter too much to long-term investors. Don't dwell on temporary issues Economic downturns will sometimes harm those companies whose shares any given investor owns. But an economic boom can do the exact opposite. Imagine how Amazon will perform once transportation and supply chain-related expenses decrease and wages increase -- meaning people have more discretionary income. The result will be more spending on goods Amazon offers and fewer costs going into delivering those goods to people's doorsteps. Businesses will also respond by pouring more money into marketing, advertising, and services that can make them more efficient and productive, including those offered by AWS. In other words, while Amazon is suffering right now, the exact opposite could happen once the economy recovers -- and it will. Investors shouldn't abandon the stock just because of the reality of economic cycles, especially considering the company's long-run outlook. Consider Amazon's position in thee-commerce sector. It remains one of the most visited websites in the world and typically offers competitive prices compared to most of its peers. Also, Amazon Prime has more than 200 million members worldwide. Prime members have various benefits, including fast shipping on plenty of items. Amazon may be planning to find new ways to squeeze money from this massive installed base in the years to come. Further, the company is the leader in cloud computing thanks to AWS, and that's another fast-growing industry with a bright future, which is why it is attracting more and more players from thetech industry. Perhaps Amazon's greatest strengths are its solid competitive edge and ability to use the massive amount of cash it generates to find new profitable business ventures. The company's moat involves a solid brand name and a network effect within its e-commerce business as more customers attract more merchants and vice-versa, making the platform more valuable over time. It also benefits from high switching costs within AWS. Amazon had $34.9 billion in cash and equivalents as of the end of the third quarter. Although that was a decrease of about 3.5% year over year, it is still more cash on hand than most corporations have. Amazon recently announcedthe launch of Amazon Clinicin a new effort to profit from the potentially lucrative telehealth market. Will this new business be a smashing success? Maybe not. But if Amazon's history has taught us anything it's that its management will find profitable ways to invest that will benefit the company and its shareholders for a long time. Buy Amazon stock and forget it Yes, Amazon is down year to date. And the company's poor performance could extend into next year. But the growth story in Amazon stock is far from finished. The good news is that its sharesnow look much cheaper than they have in some time. For investors who want to beat the market in the next 10 or 20 years, investing in this tech giant and holding on to its shares is an excellent place to start. $Amazon.com(AMZN)$