Amazon Stock Is Down 11% in 2025. Should You Buy the Dip in AMZN or Run Far Away?

After a brief rally fueled by election excitement, the tech-heavy Nasdaq Composite Index ($NASX) has experienced a major correction, leaving the index down nearly 9% in the year to date. Analysts attribute the decline not to poor company performance, but to broader headwinds, including tariffs and federal spending cuts that have unsettled investors.

In this challenging environment, Amazon (AMZN) has also felt the pressure, falling more than 11% in 2025. However, this selloff has opened the door for buying opportunities for some investors, as the stock is now trading at a more attractive valuation.

Investors now must question whether current conditions present an opportune time to scoop up blue-chip stocks like Amazon. Let’s dig deep to find out the answer.

About Amazon Stock

Founded in 1994, Amazon (AMZN) is a leading e-commerce company with a market capitalization of more than $2 trillion. Beyond its core retail operations, the company has significantly expanded its footprint into artificial intelligence and cloud computing. Its emerging advertising business also positions it for sustained long-term growth. 

Amazon’s stock performance is no different from the other “Magnificent 7” members. After hitting an all-time peak of $242 in February 2025, the stock has pulled back 19%. However, over a 52-week period, it remains up 11.6%.

The key highlight is that Amazon is currently trading at 30x forward earnings, which is the cheapest level in the past three years, although it remains higher than the sector average of 15x. Based on its growth estimates, the P/E ratio is expected to come in at 26x in 2026 and further decline to 14x in the next five-year phase, making its stock worth considering for long-term investment.

Amazon Beats Q4 Earnings Estimates

In its Q4 report released on Feb. 6, Amazon delivered another robust performance, marking the eighth consecutive quarter of double-digit upside surprises. Total sales reached an impressive $187.79 billion, beating the $187.30 billion consensus, while earnings per share surged to $1.86 against an anticipated $1.52. The top-line performance was driven by operational efficiencies and notable improvements in operating margins across its divisions, which helped revenue to grow 10% year-over-year.

Breaking down segment performance, Amazon Web Services (AWS) reported $28.8 billion in revenue, in line with analyst estimates, while the advertising segment generated $17.3 billion, slightly below expectations but up 18% year-over-year, contributing significantly to the overall profit surge.

On the profitability side, the company’s net income saw almost 100% growth from $10.6 billion to $20 billion, thanks to CEO Andy Jassy’s cost-cutting plan, which he started in 2022.

“Our relentless focus on operational excellence and strategic investments continues to drive both top-line and bottom-line growth, positioning us well for the challenges and opportunities ahead,” the CEO said during the Q4 earnings call.

Looking forward, Amazon provided guidance with next-quarter revenue expected to range between $151 billion and $155.5 billion, factoring in an anticipated $2.1 billion impact from foreign exchange headwinds. 

For the full fiscal year, analysts project revenue between $750 billion and $770 billion, with adjusted EPS estimated to fall between $3.25 and $3.40, underscoring optimism for continued robust performance.

Recent News About Amazon

On March 3, Amazon announced that its cloud arm will invest $8.2 billion in Maharashtra, India, over the coming years, deploying advanced GPUs, cutting-edge technologies, and cloud management services to bolster local data storage and cloud infrastructure. The initiative, set for rollout by 2029–2030, is expected to drive significant employment growth and capture market share in India’s rapidly expanding $24.2 billion cloud sector, fueling Amazon’s global growth.

On Feb. 6, Amazon said it plans to boost its capital expenditures to $100 billion in 2025, up from roughly $83 billion last year. 

What Do Analysts Think About Amazon Stock?

Wall Street analysts are confident about Amazon’s future growth prospects. A group of 50 analysts has assigned a consensus “Strong Buy” rating to the stock, with a split of 45 “Strong Buy” ratings, four “Moderate Buy” ratings, and one “Hold.” Notably, there are no “Sell” ratings for the stock.

Analysts have also set a hefty mean price target for Amazon at $268.86, suggesting about 37% upside potential over current levels.