Amazon (AMZN) stock has faced significant challenges following its first quarter earnings report, contributing to its 2025 woes. The company’s shares have remained below both its 50-day and 200-day moving averages as investors grapple with the potential risks posed by tariffs and broader economic concerns. As of Monday’s close, Amazon stock was down 14.5% overall this year, despite initial optimism about its AI potential and e-commerce profitability gains.
Analysts are closely scrutinizing the position of Amazon Web Services (AWS) in the competitive landscape for enterprise artificial intelligence spending, particularly against Microsoft (MSFT). However, the primary concern revolves around the potential impact of tariffs on Amazon’s vast digital storefront. Since April 2’s “Liberation Day,” when President Donald Trump announced his broad tariff plan, Amazon stock has declined by 5%. The shares are also down more than 20% from their record highs reached in February.
Key Concerns and Market Performance
Although some tariffs have been paused, 145% levies on Chinese goods remain in place. With an estimated 50% of Amazon’s third-party sellers based in China, assessing the broader impact of triple-digit tariffs on Chinese imports is “nearly impossible,” according to William Blair analysts. Amazon stock fell 1.9% on Monday, closing at $186.35, and is currently trading about 2.5% below its 50-day moving average.
Earnings Report and Analyst Outlook
Amazon’s Q1 earnings beat Wall Street estimates, with earnings increasing 62% year-over-year to $1.59 per share and sales growing 9% to $155.2 billion. However, the company’s guidance for the current quarter disappointed investors, with projected operating income of $15.3 billion, below the $17.6 billion expected by analysts. Despite this, 95% of the 73 stock analysts following Amazon maintain a buy rating, according to FactSet, with an average target price of $241.60, implying roughly 29% upside potential.
Market Analysis and Future Prospects
The IBD MarketSurge charts indicate that Amazon stock is in a consolidation pattern, with a potential entry point at $242.42, representing a 23% increase from its current level. Amazon’s Relative Strength Rating stands at 38, meaning it has outperformed just 38% of stocks in the IBD database over the past 12 months. Analysts like Morgan Stanley’s Brian Nowak remain confident in Amazon’s long-term prospects, citing its logistics leadership and advancements in generative AI. However, visibility on costs for delivering a leading customer experience remains low, particularly in the context of potential changes in China tariffs and trade agreements.
