After a strong start to the year, the Nasdaq Composite Index ($NASX) has experienced volatility, dropping nearly 9% in 2025. The company (NASDAQ:AMZN) has not been immune to this downturn, with Amazon stock falling more than 11% year to date. This decline has investors wondering whether now is the right time to buy or if more downside risk lies ahead.

Understanding Amazon’s Recent Stock Performance

Amazon stock has followed a familiar pattern seen in other tech giants. After reaching an all-time high of $242 in February 2025, AMZN has since pulled back by 19%. Despite this decline, the stock remains up 11.6% over the past 12 months.

Amazon currently trades at 30 times forward earnings, its lowest valuation in three years. However, this is still significantly higher than the sector average of 15 times earnings. Analysts expect the price-to-earnings (P/E) ratio to drop to 26x in 2026 and further decline to 14x over the next five years, suggesting future growth potential.

Amazon’s Strong Q4 2024 Earnings

On February 6, 2025, Amazon released its Q4 2024 earnings, exceeding market expectations. The company reported:

Revenue: $187.79 billion (vs. $187.30 billion expected)

Earnings per share (EPS): $1.86 (vs. $1.52 expected)

Amazon Web Services (AWS) revenue: $28.8 billion (in line with estimates)

Advertising revenue: $17.3 billion (+18% YoY)

CEO Andy Jassy’s cost-cutting initiatives played a crucial role in the company’s profitability, with net income nearly doubling from $10.6 billion to $20 billion.

Amazon’s next-quarter revenue is projected to be between $151 billion and $155.5 billion, with full-year revenue estimates ranging from $750 billion to $770 billion. Analysts forecast adjusted EPS between $3.25 and $3.40 for the full fiscal year.

Amazon’s Growth Initiatives

Amazon continues to invest heavily in global expansion. In early March, the company announced an $8.2 billion investment in India’s cloud computing sector, aiming to strengthen its infrastructure in the country’s rapidly growing $24.2 billion cloud market.

Additionally, Amazon plans to increase capital expenditures to $100 billion in 2025, up from $83 billion in 2024, signaling continued long-term growth investments.

Wall Street’s Amazon Stock Forecast

Analysts remain bullish on Amazon stock. Of the 50 analysts covering AMZN:

45 rate it a “Strong Buy”

4 assign a “Moderate Buy”

1 holds a “Neutral” rating

No analysts recommend selling

The average price target for AMZN is $268.86, implying a potential 37% upside from current levels.

Should You Buy Amazon Stock Now?

Amazon’s recent stock decline may present a buying opportunity for long-term investors. With strong earnings, continued growth in cloud and advertising, and heavy reinvestment into expansion, AMZN remains a leader in the tech sector. While short-term volatility may persist, analysts project significant upside potential.

For investors with a long-term horizon, Amazon stock remains an attractive option in 2025.

Featured Image: Megapixl©Wolterk

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