Here’s Why Amazon.com (AMZN) Declined in 2022

Investment management company First Pacific Advisors recently released its “FPA Crescent Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 8.42% compared to a 7.56% return for the S&P 500 Index. The fund delivered a -9.20% return in 2022 compared to a -18.11% return for the S&P 500 Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022

FPA Crescent Fund highlighted stocks like Amazon.com, Inc. (NASDAQ:AMZN) in the fourth quarter investor letter. Headquartered in Seattle, Washington, Amazon.com, Inc. (NASDAQ:AMZN) provides consumer products and subscriptions. On February 9, 2023, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $98.24 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was 3.12%, and its shares lost 38.22% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $1.007 trillion.

FPA Crescent Fund made the following comment about Amazon.com, Inc. (NASDAQ:AMZN)  in its Q4 2022 investor letter:

Amazon.com, Inc. (NASDAQ:AMZN) declined in price during the year as it became apparent that, having doubled the footprint of the company’s retail infrastructure coming out of Covid, the company had expanded too aggressively. The investment community is similarly concerned that the company’s cloud business, AWS, is likely to be negatively impacted by general economic malaise, which would result in a growth rate lower than that of the recent past. Taking a long-term view, we envision both AWS and retail growing over the coming years, complemented by a high margin advertising business. Looking forward, we expect the company to benefit from positive operating leverage under the keen eye of CEO Andy Jassy, who has proven himself as a results-oriented leader in his former position as head of AWS. Though the valuation looks rather rich at the moment on near-term results, if we are correct in our thesis, the valuation at present prices will look to have been a bargain in hindsight.”

Amazon

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Amazon.com, Inc. (NASDAQ:AMZN) is in 2nd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 269 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the third quarter, which was 252 in the previous quarter.

We discussed Amazon.com, Inc. (NASDAQ:AMZN) in another article and shared RGA Investment Advisors’ views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.