Will 2023 be the year of comeback for Amazon?

As the most aggressive monetary tightening cycle in the history of the Federal Reserve brings recession concerns, the year 2022 proved to be a nightmare for technology companies. The Nasdaq composite index, primarily consisting of large technology firms, completed the year 2022 with a loss of nearly 33%, but showed a strong performance in the first quarter of 2023. Since January, the Nasdaq index has risen by almost 18%. Looking from a historical perspective, when recession concerns become more apparent, the US 10-year Treasury bond yields also tend to fall. As the end of the Federal Reserve's rate-hiking cycle approaches, support for technology companies can be expected. While technology companies have begun 2023 with a recovery, they continue to trade far from their peak. This raises the question of whether technology stocks should be bought here, if the winds turn against interest rates.

It would be wrong to see and evaluate the Washington-based large technology company Amazon solely as an e-commerce company. Although it is the leader in the e-commerce sector, the company stands out with its cloud computing technology and artificial intelligence investments in the United States. Amazon, which lost nearly 49% of its value in 2022, was one of the companies affected by recession concerns. Looking at the latest financials, it can be said that the company showed weak performance. While the company's revenues reached 514 billion USD with a 9% increase, the cash generated from operations was only 46.8 billion USD with a 1% increase. One of the most immutable rules of the stock market is that expectations are bought and realities are sold. The decline in consumer spending due to high inflation and the rise in operating expenses put pressure on the profits and losses of most companies. This pressure was reflected in the 2022 balance sheets. The economic winds will eventually turn. However, Amazon will continue to have a strong presence in all three growing sectors. Amazon's market value is currently close to 1 trillion USD. Its market value is expected to reach 2 trillion USD by 2033. When we look at the company's growth projections and value-added product range, an annual growth rate of 7.2% seems reasonable. Within 10 years, Amazon positions itself as a significant player in e-commerce, cloud computing, and digital advertising, which are predicted to achieve double-digit growth.

Is the pullback in stock price an opportunity to buy Amazon?

It is expected that the company will announce its first quarter financials on April 27th. Upon examining the company's lower revenue items, we see that online store sales decreased by 2% in the fourth quarter. Despite the fact that the company has increased its physical store investments for 2022, the fourth quarter store revenues only achieved a growth rate of 6%, which was disappointing. We believe that the services side is the part that should excite investors the most. While product sales only increased by 0.5% in 2022, service sales increased by 18.5% annually. We believe that the revenue growth expectations for Amazon's web services in cloud computing technologies have not yet been priced in. An unexpected increase in the service revenue item in the first quarter financials could make Amazon stand out. A surprise increase may be seen in cloud technologies and web service revenue in the service item. The company's value is currently 46% below its all-time high. Amazon's vision and the value it creates suggest that it could be a good choice for the medium term. From a technical standpoint, Amazon is priced below its 200-day moving average. In the event of possible upward movements, the first target could be the 107 USD level, which is the level above the 200-day moving average. On possible pullbacks, the 81 USD and 94 USD levels could be evaluated as buying opportunities.