To The Moon

The first quarter of 2023 was a remarkably profitable one for tech investors, helping to turn the corner on a nightmarish 2022. Stocks that were pummeled last year have rebounded with strong gains. 

The seven tech companies with market values above $500 billion -- Apple (ticker: AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), Nvidia (NVDA), Tesla (TSLA), and Meta Platforms (META) -- have each rallied at least 20% in 2023, outstripping a 7% gain for the S&P 500 index. 

Investors think the Federal Reserve is nearly finished tightening monetary policy -- and they anticipate steady and then declining rates. As a result, miserable first-quarter results -- and they almost certainly are going to be pretty bad -- might not matter.

Amazon shares have rallied 24% this year, and Amazon Web Services continues to dominate cloud computing, but both have suffered a multiquarter deceleration, as customers tighten budgets. This past week, research firm IDC trimmed its 2023 enterprise spending forecast for the fifth month in a row. According to FactSet, analysts see March-quarter AWS growth of 17%, down from 20% in December and 27% in September.

Looking at the other tech giants, things get better from here -- that recession or not, the transition to cloud computing will continue. There are some near-term worries for Amazon, sluggish online-shopping growth.

See me rise to the occasion

Andy Jassy became Amazon's chief executive in 2021. Amazon last month said it would lay off 9,000 people after detailing plans to lay off more than 18,000 employees in January, following the pandemic's digital boom and bust.

Oppenheimer's call for deeper cuts wouldn't be the first from an analyst. After Amazon outlined plans to cut 18,000 people from its ranks early this year, Morgan Stanley analysts said the company, along with the tech industry overall, could tighten up costs even more.

Even as Amazon.com Inc. sheds thousands of employees, analysts say the online retailer will need to cut even more to lift up margins in its ecommerce business, as profitability per corporate employee lags behind its Big-Tech peers.

Fire, fire, pants on fire...

"Following our deep dive into AMZN expenses, we believe more layoffs are necessary for eCommerce to become meaningfully profitable," Oppenheimer analysts said in a research note on Thursday.

They said Amazon's sagging share price could be chalked up to market share loss to Microsoft Corp. (MSFT) -- whose Azure cloud-services platform competes with Amazon's (AMZN) AWS -- and lack of profitability in Amazon's ecommerce segment. The analysts said investors were "overly bearish" on AWS.

The Oppenheimer analysts also said that Amazon's profit per non-warehouse employee trailed companies like Alphabet Inc. (GOOGL), Microsoft and Meta Platforms Inc. (META).

Recent trough to peak rebounds of the 10 largest tech companies as follow:

$NVDA +149%

$META +148%

$TSLA +82%

$BABA +77%

$TSM +54%

$AVGO +53%

$MSFT +38%

$AAPL +33%

$GOOG +32%

$AMZN +25%

Shares of Amazon were up 0.95% on Friday. The stock is down 35% over the past 12 months. The S&P 500 index has fallen 8.6% over that period.

Riding the uptrend channel 

⚠️ Trading Tips: AMZN could be the weakest link trailing behind the rest for now. It could be a slow and steady climb to fill the gap up in the coming week or two. ⭐️ Looking at calls above 103.5 and puts below 100 next Monday. Exciting times ahead!

Trade summary for Week #1 April

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