Amazon stock is trading cheaply on 1 valuation | Investment News
- Analyst
- Mar 11
- 3 min read
Amazon stock is trading cheaply on 1 valuation – Investment News
The last time Amazon’s stock (AMZN) regarded this low cost on a price-to-earnings a number of foundation, CEO Andy Jassy was nonetheless a relative newcomer to the seat.
Shares of the e-commerce and cloud computing giant are trading on a ahead price-to-earnings (P/E) a number of of 30 occasions, their lowest P/E in three years, in keeping with information from FinChat. While that is low cost for Amazon, it isn’t the most affordable on a relative foundation to different “Magnificent Seven” stalwarts.
That distinguished honor goes to fellow cloud competitor Microsoft (MSFT), whose stock trades on a ahead price-to-earnings a number of of 18.9 occasions.
Lower valuations for these high tech names come amid a broader rout in markets as merchants digest the potential for a recession beneath tariff-wielding president Trump.
Listen: (*1*)Why Rubbermaid’s CEO is frightened about tariffs
The Dow Jones Industrial Average (^DJI) slumped 890 factors, or about 2.1% on Monday. The S&P 500 (^GSPC) fell by 2.7%, whereas the tech-heavy Nasdaq Composite (^IXIC) shed 4%.
All three main indexes are off by more than 5% previously month, with the Nasdaq Composite main the best way with an 11% plunge. Amazon shares have tanked 16.5% within the last month.
“After a historical bull market led by the AI Revolution over the past two years we are now seeing major investor worries as the Trump tariff news, perceived recession fears, and tech growth concerns have sent tech investors for the exits and heading for the hills,” Wedbush tech analyst Dan Ives mentioned.
Not serving to sentiment on Amazon (and to a lesser extent, Microsoft) is a blended fourth quarter that stoked issues about near-term demand for Amazon Web Services (AWS).
AWS gross sales cooled a contact to a 19% year-over-year growth charge. This consequence was according to cloud growth slowdowns at Microsoft and the like.
Amazon guided to first quarter income of between $151 billion and $155 billion. Analysts had been anticipating $158 billion; the miss was partially attributable to a $2.1 billion anticipated hit from currency fluctuations.
“Our discussions w/investors suggest the quarter & outlook were not thesis-changing for the well-owned name, but there are incremental concerns around the trajectory of AWS growth, & to a lesser degree the macro impact on Stores,” JPMorgan analyst Doug Anmuth wrote in a consumer word.
It stays to be seen if buyers view Amazon’s stock as low cost enough at present valuation ranges given financial growth fears. But it is value nothing the Street hasn’t misplaced confidence in Amazon, at the least not but.
Read more: Why Tesla is nonetheless a sell
Yahoo Finance information exhibits that 95% of sell-side analysts proceed to charge Amazon’s stock a Strong Buy or Buy. The average price goal is $264.71, properly above the present trading price of $195.69. Earnings per share estimates for 2025 and 2026 have stayed pretty constant since Amazon reported its newest ends in early February.
Added Ives, “Despite much criticism, that is how we have always called our tech winners and many times over the years with Tesla, Apple, Google, Nvidia, Amazon, Palantir among others our backs were against the wall and the times appeared dark at that moment … but yet those were the golden opportunities and that is our view today.”
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on tales? Email brian.sozzi@yahoofinance.com.
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