Barron Weekly wrote an article bullish in July this year.$Amazon (AMZN.US)$Believes that the company's cloud business AWS has great long-term value. But the company's shares have fallen 25 per cent since July as investors worry about Amazon.Com Inc's core ecommerce business and AWS's near-term growth prospects.

While these concerns are understandable, Amazon.Com Inc is still a stock worth holding for a long time.

AWS's revenue growth has slowed faster than expected and analysts now expect revenue growth of 25 per cent in the fourth quarter of this year, down from 40 per cent a year earlier.

But as Piper Sandler analyst Thomas Champion (Thomas Champion) wrote in a recent research paper, A.WS has more than 50% of the cloud computing market and is expected to break the $100 billion revenue barrier in 2023.This is more than three times that of Salesforce.com Inc, and Salesforce.com Inc's growth rate is only half that of AWS. If Salesforce.com Inc is used as a reference, the value of the Amazon cloud business will account for more than half of Amazon.Com Inc's current market capitalization of about $940 billion, and the value of the business will continue to grow.

In addition, Amazon.Com Inc's core business, e-commerce, continues to grab market share, but consumers are spending less because of macro factors such as rising inflation, high interest rates and a potential recession.

Revenue from Amazon.Com Inc's online store fell 3 per cent in the first quarter, 4 per cent in the second quarter and 7 per cent in the third quarter. Wall Street analysts expect revenue from the business to be the same as in the same period last year, which seems to be a worrying expectation, as most forecasts show at least a small increase in the overall revenue of the online store industry during the holiday shopping season.

But the online store is only part of Amazon.Com Inc's e-commerce business growth story. The company has a huge warehouse and delivery infrastructure that powers the third-party seller service business, as well as a growing advertising department that helps Amazon.Com Inc sellers draw consumer attention to their products. By 2023, third-party revenue will reach $125 billion, and advertising revenue will exceed $44 billion, more than 1/3 of the size of Meta Platforms's advertising business.

During the outbreak, as a result of the massive construction of its platform, Amazon.Com Inc's number of employees has doubled since the end of 2019 to more than 1.5 million. The company recently changed its strategy, laying off staff and closing some warehouses.

Michael Norton, an analyst at MoffettNathanson, recently began to cover companies that analyze e-commerce. He points out that since 2001, the share of online shopping in the US retail market has expanded from 1 per cent to 14 per cent. Norton believes this trend will continue. "online shopping is more convenient and usually cheaper for consumers," he said. "

When publishing the research report, Norton recommended only one stock, Amazon.Com Inc, who thought the company's e-commerce business was undervalued.

Norton believes that Amazon.Com Inc is gradually turning the situation around and refocusing on its cost structure. He estimates that the company invested $81 billion in logistics and transport infrastructure from 2020 to 2022, and Amazon.Com Inc is about to reap the return on those investments.

Norton pointed out that when Amazon.Com Inc is controlling costs, the logistics business will improve. He expects the company's spending on logistics and transportation to fall from $25 billion this year to $10 billion in 2025.

Norton believes that Wall Street's estimate of Amazon.Com Inc's capital expenditure is too high, while the estimate of free cash flow is too low. He said lower operating leverage and additional spending controls could push pre-tax profits in 2023 18 per cent higher than wall street expectations and 9 per cent higher than consensus forecasts in 2024.

Norton expects Amazon.Com Inc's earnings per share next year to be $1.93, much higher than Wall Street's $1.68. He expects pre-tax margins to reach 4.8 per cent next year and 6.7 per cent in 2024, higher than Wall Street's 2.5 per cent forecast.

"the decline in higher-than-expected profits and capital intensity is good for rising valuations," Norton said. "over the past three years, Amazon.Com Inc's valuation has been squeezed, pre-tax profit expectations have fallen, and capital intensity is higher than expected. I think that is about to change. "

Since peaking in November 2021, Amazon.Com Inc's share price has fallen by about 50 per cent, losing nearly $1,000bn in market value in the process. But as Piper Sandler analyst Champion points out, the 56 per cent fall in 2008 laid the foundation for a 270 per cent rise over the next 12 months, and while past performance does not guarantee future performance, the possibility of a sharp rebound in share prices cannot be ignored given Amazon.Com Inc's dominant position in cloud computing and ecommerce.