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In recent weeks, some of my favourite stocks including Amazon (NASDAQ: AMZN) and Uber (NYSE: UBER) have taken big hits. Currently, these two names are trading between 10% and 25% below their recent highs.
Should I capitalise on the share price weakness and buy more stock for my portfolio? Let’s discuss.
Amazon has many ways to win
Amazon had a relatively strong run into its Q4 earnings. However, it then got hit after the company announced in its earnings that it plans to spend a whopping $200bn on AI and data centres this year.
That’s a huge amount of money. And it has clearly spooked a lot of investors.
Now obviously, this kind of capital outlay adds risk to the investment case because return on investment is unclear at this stage. However, I’m inclined to see the share price dip as a buying opportunity.
Ultimately, this company continues to have many different ways to win. Not only is it a global leader in cloud computing and e-commerce, but it’s also doing amazing things in digital advertising, chips, robotics, and low earth orbit satellites.
Note that looking beyond the $200bn capex shock, performance in Q4 was actually very strong. Sales were up 14% year on year with cloud revenues growing 24%.
Notably, revenue from its AI chips grew by a triple-digit percentage year on year. Annualised revenue here is now over $10bn.
Given this momentum, I’ll be looking to buy some more shares in the weeks ahead, assuming the share price stays around $200 to $210. Taking a long-term view, I think that move should pay off.
Uber still has tons of potential
Turning to Uber, it has fallen from around $100 to $75 recently (a decline of 25%). One reason for this is that companies like Tesla and Alphabet have been making a lot of self-driving taxi announcements.
Personally, I don’t see the share price weakness as justified. Because Uber has partnerships with a ton of different autonomous vehicle (AV) companies.
In the long run, I expect it to be the dominant platform for mobility. With so many different partnerships, it should be able to offer consumers the best service.
“We enter 2026 with a rapidly growing topline, significant cash flow, and a clear path to becoming the largest facilitator of AV trips in the world.”
Uber CEO Dara Khosrowshahi
Looking at Uber’s Q4 earnings, business performance is strong right now. For the period, revenue was up 20% to $14.4bn thanks to a 22% increase in the number of trips on its platform (3.8bn).
Net cash provided by operating activities was $2.9bn. Meanwhile, free cash flow was $2.8bn.
Of course, there’s no guarantee that this strong performance will continue. A drop in consumer spending could hurt Uber’s growth.
With the stock now trading on a forward-looking price-to-earnings (P/E) ratio of only 22, however, I see a lot of appeal. I’ll be looking to buy more shares in the weeks ahead.
