Shares of Amazon (AMZN) have continued to fall since Oct. 27 when the ecommerce giant reported disappointing third-quarter earnings, but the drop offers an opportunity to long investors and those who can spot trends to jump in.
Amazon's quarterly earnings came in at 52 cents a share, missing analysts' forecast of 78 cents a share. The stock has fallen more than 8% since then.
But Amazon has been able to show strong growth over the previous six quarters. This is impressive because the company operates in a highly competitive market and has made a big push into the media business.
Moreover, Amazon's meteoric rise from street corner bookstore to global giant is fueled by the fact that it keeps pushing for new frontiers.
For instance, the company recently made the brave decision to bring Amazon Prime to China by offering an attractive first year price of $28. Interestingly, the Chinese commerce market is dominated by Alibaba and JD.com.
Investors don't expect Amazon to dominate in China over the next few years, nor is that necessary. China has a rapidly growing middle class population with high disposable incomes.
This combined with China's high adult population means that a substantial slice of the ecommerce pie would be game-changing for Amazon's revenue figures. It is worth noting that Amazon isn't starting from square one in China but going in with substantial knowledge of delivery and logistics.
Meanwhile, third-quarter sales in the company's Amazon Web Services cloud business shot up by 55%. AWS is a key growth driver for Amazon because automation and big data is a rapidly growing industry.
Amazon's Alexa Internet data analytics business also continues to grow well and provides the ecommerce giant with the chance to collect detailed data on customers.
In addition, the AmazonFresh grocery service is being expanded to Chicago, Dallas and London.
Notably, investors were expecting Amazon Prime Air drones to have taken flight by this point in the year. However, it looks like that will happen in the second half next year.
The drones will help make Amazon's fulfillment process more efficient and allow the company to save money.
Furthermore, in an effort to have greater control over logistics, Amazon recently purchased some Boeing 767 cargo jets.
Recently, Amazon has invested heavily in equipment and research and development. However, these are costs with long-term benefits.