• Amazon reports record sales of $514 billion

• However, the company posted a total loss of $2.7 billion in 2022, and shrinking international business could be a concern.

• Likewise, Rivian's fluctuating stock price is weighing on Amazon's profitability, as the company holds a few million shares of the electric vehicle maker.

Q4 and full-year results for 2022 - dark clouds on the horizon or bright sunshine for Amazon's future? At this point in time, it is impossible to say for sure. But what happens in the near future and what the direction will be will be decisive for the company. 

Here's an initial assessment: Amazon will make a shift in focus from growth to profit! Although 2022 was not an easy year in e-commerce, the company managed to grow. That this remains the course is now in the room. 

Now to the hard facts regarding sales:

Amazon reported net sales of $149.2 billion in Q4 2022, up 9% year-on-year. The advertising business (+19% YoY) and the US e-commerce sector (+13% YoY) were the main contributors to growth. However, global sales declined more sharply than in previous quarters (-8% YoY) due to inflation in core European countries combined with the energy crisis.

Overall, Amazon's sales increased by 9% to $514 billion in the full year 2022. The US market in particular (+13% year-on-year) contributed to growth, while international sales were weaker (-8% year-on-year). This exceeded experts' expectations and estimates for the fourth quarter.

Amazon, however, faces challenges that must be overcome. Operating profit last year fell 50% from the previous year to $12.2 billion. The company plans to reduce or remove unprofitable business units and will lay off 18,000 employees, which will inevitably lead to high severance payments and further costs.

New CEO Andy Jassy has a tough task ahead of him as he follows in Jeff Bezos' footsteps. Succeeding a company when its founder is gone is fraught with challenges. Most importantly, everyone is watching very closely! He will focus on efficiency, speed and pricing to make the company more profitable. Whether he can preserve Amazon's innovative soul in the process is the crux of the matter. It's important that Amazon apply its innovative mindset to other areas that have higher gross margins and lower capital expenditures than the current business.

The vaunted "Prime Flywheel" could also be vulnerable, the faster it runs. It remains to be seen whether Amazon succeeds and goes its way, or whether this is the beginning of the end of Amazon's Prime success story.