As the stock market prepares to officially cross the threshold of a bear market, investors are eyeing one of their best opportunities to find low-priced growth stocks to buy.

Soaring inflation, rising interest rates and protracted supply chain issues have conspired against companies trying to distance themselves from the lingering effects of the coronavirus pandemic. Growth stocks were particularly hard hit.

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Where the vast market S&P500 the index is down 17% since the start of the year, Vanguard Growth Index Fund has fallen 28% so far this year. Some of the best performing stocks of 2021, like Bath and body care and Forddo even worse, plunging 45% and 38% respectively.

While there’s still a long way to go for many companies as consumers reel in the brunt of the declining economy, not all stocks will experience such a tough time. In fact, even though (AMZN 3.66%) also lost 35% of its value so far this year, there’s good reason to believe it’s going to do well, which is why it’s my top growth stock to buy now.

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A difficult start to the new year

This may seem incongruous since Amazon was broken up over fears of slowing growth. First-quarter retail sales fell nearly 2% to $56.5 billion, while operating profit fell to $3.7 billion, a 58% drop. This resulted in a net loss of $3.8 billion, or $7.56 per share.

These kinds of numbers, however, miss the big picture. First, most of Amazon’s losses were the result of its investment in an electric truck maker Rivian, which has suffered a more than 65% deterioration in value since its initial public offering (IPO) last year. Additionally, international e-commerce sales fell 6% from the prior year period.

While these losses are significant, Amazon’s US retail sales, which account for about 60% of total revenue, still recorded a 7.5% gain. Amazon Web Services (AWS), its cloud computing business, saw revenue rise 37% from a year ago to $18.4 billion, while operating profits soared further, jumping 57% to $6.5 billion.

These numbers show that while Amazon is not completely immune to the broader economic forces affecting the retail industry, its operations otherwise remain strong.

Dealing with rising costs

Amazon has taken a number of initiatives to bolster its business, such as raising the price of its Prime member loyalty program from $119 to $139 per year and imposing a 5% fuel surcharge for independent sellers on its site. Fulfillment costs jumped 23% year-over-year to more than $20 billion, although this came as the e-commerce giant doubled the size of its fulfillment network in 24 months.

Even so, he says he now has excess capacity. Although contributing $2 billion in additional costs over last year, this gives the company the opportunity to grow its business up to the capacity it currently enjoys.

Additionally, Amazon chief financial officer Brian Olsavsky told analysts the retailer “sees no weakness” in consumer demand, even as it monitors the impact of inflation on consumer budgets. .

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head in the cloud

Of course, most important is Amazon’s cloud business, which has long been the profit center of its operations. As companies continue to migrate their operations and data to the cloud, AWS’s growth is expected to continue at the breakneck pace it has grown accustomed to, even as more competitors enter the space.

“We’re really still close to the start of the global cloud transition,” said Adam Selipsky, Amazon CEO at AWS. FinancialTimes earlier this year. Only about 5-15% of enterprises have moved their IT workloads from internal data centers to cloud infrastructure networks.

He expects almost everyone to make the move to the cloud eventually, whether it’s to Amazon, Microsoftazure, or Alphabetis Google Cloud.

It’s time to act

Amazon is also preparing to split its stock 20 to 1. At current prices, that will put the shares at around $110 each, a much more affordable price to attract retail investors. Even though a split does not change a company’s fundamentals, it is still seen as a bullish sign by the market.

Wall Street expects Amazon to grow its profits by 40% a year over the next five years, and with the stock down 45% from its all-time high, now seems like the perfect time to acquire this growth action.