Without a doubt, 2022 was a tough year for Amazon (NASDAQ:AMZN) stock. Will this year be any better? It’s hard to be bullish about Amazon now, given the company’s vulnerability to a shaky macroeconomic environment.

Before you assume that there’s a prime dip-buying opportunity here, take note of Amazon’s problems and challenges. Then, you’ll probably want to stay out of the trade for a while.

Among the most important lessons from last year is the revelation that tech titans aren’t impervious to economic issues. It was only a few years ago when Amazon seemed invulnerable to life’s problems. The Covid-19 pandemic that brought other businesses to their knees, only made Amazon stronger.

Now, investors are discovering that Amazon isn’t infallible. Not only that, but it’s entirely possible that Amazon’s shareholders could continue to lose money, even after a bruising 2022.

What’s Happening with AMZN Stock?

The carnage has been extensive, as AMZN stock has fallen from $180 to $100 in an alarmingly short period of time. As they say, the bigger they are, the harder they fall.

With that drawdown, Amazon is at risk of losing its $1 trillion market capitalization. Yet, Amazon shares aren’t really cheap in relation to the company’s earnings. Believe it or not, even after the share-price decimation, Amazon’s trailing 12-month price-to-earnings (P/E) ratio is still quite elevated at around 89x or 90x.

Will Amazon’s upcoming earnings event save the day for Amazon’s stakeholders? Don’t make any assumptions here. Bear in mind, Amazon’s fourth-quarter 2022 revenue guidance was anemic, at $140 billion to $148 billion. This came in below Wall Street’s estimate of $155.15 billion and represents year over year growth of just 2% to 8%.

Amazon’s Cloud Business Could Struggle in 2023

Thus, we’re starting to see cracks in the foundation of the almighty Amazon. Along with the soft revenue guidance, investors should consider Amazon’s layoffs, which ramped up from 10,000 to over 18,000. Furthermore, there’s talk that Amazon’s foray into the cloud-gaming market is faring badly.

The biggest concern, though, might be about Amazon’s cloud-computing business, known as Amazon Web Services or AWS. Citing the U.S. economy’s uncertain outlook, Oppenheimer analyst Jason Helfstein lowered his AWS revenue estimate for Q4 2022 by 1%, and for full-year 2023 by 3%.

It’s a harsh reality that companies and their shareholders must face in 2023. In a shaky economy, some businesses will undoubtedly cut back their spending on technology products and services.

Mizuho analyst James Lee eloquently articulated this line of thought.

“In the uncertain economic environment, we believe that enterprise customers are looking to reduce IT spending by pausing migration or trading down products, creating demand volatility,” he wrote.

In a similar vein, Bank of America analyst Justin Prost expressed concerns that AWS, and Amazon generally, could be “pressured by consumer and corporate spending cuts” this year. Clearly, some of Wall Street’s experts aren’t super-bullish on Amazon’s cloud-computing division in the near term.

What You Can Do Now

Amazon certainly doesn’t deserve an “F” rating, as it’s still a behemoth with a massive tech-market presence. Yet, Amazon’s valuation is quite elevated and the share price could continue to fall in early 2023, so a “D” rating is justified.

Besides, Amazon could quickly lose its $1 trillion market cap as the uncertain U.S. economy won’t make it easy for AWS to thrive. Therefore, prospective investors should be cautious with AMZN stock, as it doesn’t present a high-conviction buy-the-dip opportunity at the moment.

On the date of publication, Louis Navellier had a long position in AMZN. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.