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Amazon.com, Inc. (NASDAQ: AMZN ) experienced a weak holiday season this year, due to a challenging macroeconomic environment and high inflation. For the biggest tech stocks, including Alphabet Inc. (NASDAQ: GOOGL) and Meta Platforms, Inc. (NASDAQ: META ), 2022 is the tax year in which it will experience large losses. Amazon seems to have entered a weak phase as the online shopping boom caused by COVID subsides.
Meanwhile, shares of the Seattle-headquartered eCommerce giant started the new year on a positive note and have maintained an upward trend ever since. Last year, it more than halved in value and shares fell for years, in what may be the worst slump in the company’s history.
Invest in AMZN
Being a diversified global player that has dominated the eCommerce space for years, Amazon has the potential to overcome challenges and create strong shareholder value in the long term. The majority of analysts are bullish on the long-term prospects of the stock, which seems poised to regain its lost strength by the end of 2023. What this means is that potential investors may not get the chance to own a lower-priced stock in the future.
Amazon.com, Inc. Transcript of Q3 2022 Earnings Call
Meanwhile, low margins and sluggish sales will continue to weigh on the company’s finances. Our core retail business and cloud division are likely to experience softness this year due to the unfavorable macro environment. The company continues to innovate in all areas of its business, leveraging the power of technology. Our unmatched global reach and aggressive pricing strategy give us an edge over others.
Shopping habits
The current weakness mainly reflects the change in consumer behavior after the reopening of the market – people have now started to spend on discretionary items now, unlike during the pandemic when they cut down on non-essential items and spend more on online platforms like Amazon . Recently, Amazon announced massive layoffs that could affect 10,000 employees. The market will follow the fourth quarter report which will be released in early February.
It is expected that revenue growth will decelerate in the December quarter, leading to a decline in net profit. Market watchers were predicting earnings of $0.19 per share on revenue of about $145 billion for the fourth quarter, which was slightly below management’s guidance. When it comes to top line performance, the uptick in the cloud business is being offset by a slowdown in the international business, lately.
What a new year for the automotive industry
“We continue to increase our investment in AWS, adding product developers and sales and service professionals to help our customers save money, make it faster in business, and transition to the cloud. We also continue to invest in new infrastructure to meet capacity needs, expand new geographic areas, develop new services, and rapid iteration to improve existing services,” said CFO Amazon Brian Olsavsky during a recent interaction with analysts.
Key Number
Below the line returned to positive territory in the September quarter, after two consecutive losses that marked the worst performance of the company in nearly a decade. At $127 billion, revenue rose 15% but fell short of market projections.
Continuing its recent recovery, AMZN traded higher this week and remained slightly above $95 on Thursday. However, it remained below the 52-week average.
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