Amazon (AMZN -1.50%) and its investors have had a troubling couple of years, with 2022's economic downturn leading to declines in its e-commerce business and slowing cloud growth. The challenges dragged down its stock by about 50% last year, with its shares still down around 18% year over year.

On April 27, the company released its first quarter of 2023 results, reporting a 9.5% rise in revenue of $127 billion and beating analyst expectations by $2.8 billion. The growth was driven mainly by a gradually recovering e-commerce business. However, investors remain wary of decreasing growth for the company's Amazon Web Services (AWS) cloud platform. 

Despite recent hurdles, Amazon's position as a leader in e-commerce and cloud computing gives it a promising long-term outlook. As a result, now is an excellent time to learn more about this tech giant while its shares are essentially on sale. 

Here are three things about Amazon that smart investors know. 

1. E-commerce is still a high-growth market 

Steep rises in inflation have caused pullback from consumers, with Amazon reporting substantial operating losses in its e-commerce segments in 2022. However, its latest quarter showed signs of recovery. In the first fiscal quarter of 2023, Amazon's North American segment reported operating income of $898 million, while the year-ago period fell to a negative $1.5 billion. Profits in its international segment also marginally improved.

The market has taken a tumble, but Amazon's position at the top of it remains a lucrative one. The e-commerce industry is valued at $4 trillion, yet online purchases were only responsible for about 15% of all retail sales last year. As a result, e-commerce has plenty of growth ahead as more consumers opt to shop online. Meanwhile, Amazon's leading market share makes it well positioned to massively profit from the industry's development.

2. Combating near-term headwinds 

Inflation has eased for nine consecutive months. However, it remains high, with prices rising 5% in March after increasing 6% in February and 9% in June 2022. The improvement gradually boosted markets like e-commerce. However, more time is needed until the industry's companies can fully recover. 

In addition to reduced consumer spending, higher interest rates have led Amazon's cloud business to suffer slowing revenue growth. AWS experienced sales growth of 37% in Q1 2022, with that figure slipping to 16% in Q1 2023. Macroeconomic headwinds forced many businesses to slash budgets for cloud services. However, this is another area likely to improve for Amazon once economic challenges subside. 

In the meantime, the company trimmed costs to stay profitable amid short-term headwinds. In 2022, Amazon announced plans to cut 18,000 jobs, then increased that number by 9,000 this year. Additionally, the tech giant canceled construction on or closed dozens of warehouses and shuttered services like its telehealth platform Amazon Care to boost savings. 

3. A bargain buy

Amazon suffered hit after hit over the last year. However, recent improvements in inflation and its e-commerce segments suggest the worst is over for the tech giant, which could mean it's back on a growth path. As a result, the company's leading market share in online retail and the cloud market makes its stock a bargain right now.

Wall Street seems to agree, as 47 out of 51 analysts currently hold a buy/strong buy rating for Amazon's stock. Meanwhile, the company's average 12-month price target of $138 would yield a 35% return based on its current position. 

Amazon faced an economically burdened environment over the past year. However, the company's solid position in multiple high-growth industries makes its stock dirt-cheap right now and a compelling buy amid a market downturn.