3 Reasons Why Amazon Still Has a Lot of Upside Potential

Stocks to buy

It’s no secret that Amazon (NASDAQ:AMZN) stock took a beating last year. Yet, this isn’t a problem; it’s only an opportunity to buy shares at a favorable price point. There are multiple reasons to expect Amazon to impress investors in 2023, though three particular catalysts stand out.

The days of Amazon being just an e-commerce business are long gone. As the company expands into a broad variety of markets, Amazon’s value to shareholders only grows. So, don’t resist the mighty Amazon when you can instead capitalize on a buy-low, sell-higher opportunity. With that in mind, here are three reasons why the Amazon share price is likely to move higher this year.

Amazon Is a Go-To Provider of Cloud Services

Among Amazon’s most successful ventures outside of e-commerce is its cloud computing business, Amazon Web Services (AWS). Amazingly, AWS offers “more than 200 fully featured services” covering practically anything and everything a business would want to do in the cloud.

The list of AWS clients is far too extensive to list here. For now, we can just report that AWS added up another big-money client as its preferred cloud provider: Southwest Airlines (NYSE:LUV).

Reportedly, Southwest Airlines will use AWS to “harness the automatic scaling capabilities of cloud technology to more efficiently process real-time fare searches on its website and mobile app.” It’s another example of how Amazon’s businesses are trusted among large- and mega-cap companies.

One Medical Buyout Is Great News for AMZN Stock Investors

So far, I don’t believe Wall Street fully appreciates the implications of Amazon’s acquisition of One Medical. As I see it, this should be considered one of the most impactful buyouts of 2023.

One Medical operates a healthcare network that includes telehealth options as well as in-office care. The company also provides “[w]alk-in availability for on-site laboratory services.” The first year of One Medical membership costs $12 per month, and an Amazon Prime membership isn’t required.

Granted, One Medical doesn’t address all healthcare needs for all situations. Still, making some healthcare services affordable certainly sounds like a win-win scenario for Amazon’s stakeholders and for the public as well.

Amazon Throws Its Hat Into the NFT Ring

In case Amazon’s business model isn’t diversified enough already, the company is also getting involved with non-fungible tokens (NFTs). Citing “three sources familiar with the matter,” BlockWorks broke the story that Amazon is preparing to enable its customers to buy “NFTs tied to real-world assets that are delivered to their doorstep.”

This sounds like more than just a rumor, as “an additional two sources” reportedly said that Amazon plans to notify every U.S. Amazon Prime customer when its “digital collectibles initiative” goes live. It’s been estimated that, at the end of 2022, Amazon had around 168 million Prime members in the U.S.

Hence, this event could propel NFTs into the mainstream. Some folks who use Amazon frequently have probably never considered buying NFTs. Soon, they might open their wallets and start buying digital collectibles — and Amazon could benefit significantly from the new revenue source. This, along with Amazon’s forays into cloud computing and affordable healthcare, should help to propel AMZN stock in 2023.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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