NEW YORK (TheStreet) -- During the last month, the Nasdaq has caught a cold. Before Wednesday's turnaround, it was down about 5%.
The stock was recently trading at $330.14, down 1.7%.
Amazon has become a proxy for the Nasdaq's troubles, because it is managed for growth instead of for profits and growth slows as a natural consequence of numbers getting bigger.
My own trading view, however, is often wrong. In January, I wrote that you should buy shares of Amazon, and everyone sold. The stock is down about 8% since my call.
The company, which reports earnings on April 24, is in great shape. Analysts are expecting first-quarter revenue of $19.4 billion, 21% higher than last year. They also expect a profit. Should Amazon fail to meet those estimates, expect another leg down in the stock price.
In the first quarter, Amazon raised the price of its Prime service from $79 a year to $99 and introduced a set-top box called Fire TV that also plays video games. This month, it announced Dash, a scanner that lets you build a shopping list by just pointing to products in the house.
Dash works with Amazon Fresh, a service in major West Coast markets that offers grocery shopping, including fresh fruits and vegetables, for $299 a year, a price that also buys you Prime. Amazon is expected to expand the service to other major markets.
The decline in Amazon's stock has brought the company's market valuation close to two times sales, which is still four times higher than a traditional retailer such as Costco (COST). It's about the same price-to-sales ratio as IBM (IBM). An IBM price with 20% revenue growth, is not a bad deal.
Amazon, however, has a bigger competitive advantage than Yelp or Twitter or even Salesforce does, and Fire TV and Dash should add to that advantage. Still, Amazon faces stiff competition from Google (GOOG) and Microsoft (MSFT) in cloud computing, from China's Alibaba overseas, from Netflix (NFLX) in streaming and from Walmart (WMT) in retail domestically.
But a trader's pneumonia can be an investor's vaccine. Amazon is becoming investable.
At the time of publication, the author owned shares of Amazon, Costco and Google.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.