Since the stock market began its coronavirus-induced selloff in mid-February, few stocks have been spared from some amount of downturn. The broader markets have lost more than a quarter of their value since mid-February, with the S&P 500 (SNPINDEX:^SPX) down 27% since the decline began (as of this writing). Over the past six weeks, investors have been on a roller coaster ride of epic proportions with unprecedented daily moves by the major indices. Yet even in this market, opportunities abound.

One of the stocks that has held up better than most is Amazon.com (NASDAQ:AMZN), which has only declined about half as much as the broader market, falling 12% over the same period. The company has made plenty of headlines for providing an e-commerce lifeline to consumers as many forgo their weekly trips to the grocery store to avoid social contact that might spread the virus.

This raises the question: In the face of economic uncertainty and the potential for a prolonged market slump, should investors consider adding Amazon stock to their portfolio right now?

Woman with a credit card in one hand and a smartphone in the other making an online e-commerce purchase.

Image source: Getty Images.

A coronavirus boost

E-commerce was a major trend that had already taken hold in the U.S. before the outbreak, and it was fueled even further by the stay-at-home movement that has taken the country by storm. E-commerce in the U.S. reached 11% of total retail in 2019, up from 9.9% the year before, and that number is sure to grow. 

There's little doubt that Amazon is a global e-commerce powerhouse, and it has quickly become the world's third-largest retailer in the process (behind No. 1. Walmart and No. 2. Costco). While estimates vary widely, Amazon accounts for nearly half of all online sales in the U.S. when including the sales from the small- and medium-sized businesses that sell on its platform, or more than one-third of digital sales on its own. It also accounts for about 4% of all retail spending in the country. 

The current COVID-19 pandemic is sure to boost the company's commanding lead. Amazon recently announced it will hire as many as 100,000 additional full- and part-time workers to staff its fulfillment centers and delivery operations, in an effort to meet the unprecedented demand. The company has also stopped accepting non-essential items at its warehouses in order to stock consumer staples and much-needed medical supplies, which will surely be a hit with customers.

There are other areas of Amazon's business that are well-positioned to benefit from the stay-at-home and remote workforce restrictions currently in place. Consumers are increasingly turning to streaming video to pass the time, including Amazon's Prime Video, and music lovers are tuning into Prime Music. As the undisputed leader in cloud computing with Amazon Web Services (AWS), the company is helping many businesses continue to work through this health crisis.

This helps to explain why Amazon's stock has held up better than the broader market since the downturn began.

Consecutively growing stacks of coins with dollar signs.

Image source: Getty Images.

Recent results

To get an idea of the strength of Amazon's business, we need only look at its 2019 results. Sales grew 20% year over year to $281 billion -- a remarkable feat for a company of its size. Even more impressive was that, even as the company invested heavily in one-day shipping, it grew earnings per share by more than 14%. 

AWS continues to be the company's crown jewel, with revenue from the cloud unit growing 37% last year, while operating profits grew by 26%. Operating margins continue to impress at 26%, boosting the company's cash and allowing investments in that and other areas of the business.

Given the current economic environment, it's also worth noting that Amazon has a rock-solid balance sheet, with $55 billion in cash and marketable securities, and just $23 billion in long-term debt, giving the company plenty of reserves to weather the storm.

Valuation

It's worth mentioning that Amazon stock has never been cheap. As of Wednesday's market close, the stock trades at more than 65 times forward earnings. It's a bit more reasonable on a price-to-forward-sales basis, at just under 3. Investors have always placed a high value on Amazon's future growth prospects, and that continues to be the case.

Some investors might consider that high, especially when factoring in that analysts are expecting sales to grow 21% in the current quarter, 19% for the current year, and just 17% next year. However, Amazon has consistently grown at a rate that defied the odds, and that will likely continue. Amazon will gain many converts in the era of coronavirus -- across a wide swath of its business segments -- and they won't simply evaporate when the ongoing health crisis is over.

A bird's eye view of an Amazon fulfillment center.

Image source: Amazon.

The bottom line

But the headline question is "Should you buy Amazon stock right now?"

I would argue that you should. Amazon has so many ways to succeed. It's the unrivaled leader in the areas of e-commerce, cloud computing, and smart speakers, all of which help spin the flywheel of Amazon's growth. It's also a serious contender in streaming video, digital advertising, and streaming music. That's not to mention its forays into logistics and delivery, brick-and-mortar stores, and cashierless checkout technology.

Amazon is cheaper than it was just a month ago, and its business prospects have only grown since the world was beset by a COVID-19 pandemic. I think now is a great time to start a position in Amazon or add to an existing position, as the company is best positioned -- in many ways -- to benefit from the global reaction to the outbreak.