Amazon.com experienced a 4.5% decline in its share price last week amid broader market challenges and sector-specific pressures. This decline paralleled a 4.4% downturn in the market, highlighted by a slump in major tech stocks including Tesla and Adobe, which influenced investor sentiment across the technology sector. The market-wide concerns were amplified by uncertainty surrounding economic policies from the Trump administration and mixed signals from recent economic data, such as the steady Producer Price Index opposed to an expected rise. Despite DigiCert's announcement of making its solutions available on AWS Marketplace, aiming to benefit mutual clients through streamlined digital trust solutions, external factors like Adobe's weak outlook and Tesla's substantial value loss contributed to the sector's negative momentum. As the tech-heavy Nasdaq saw a significant drop, Amazon's performance mirrored this trend, reflecting broader apprehensions over current economic and policy challenges.

The valuation report we've compiled suggests that Amazon.com's current price could be quite moderate.

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Amazon.com (NasdaqGS:AMZN) has delivered a total shareholder return of 117.37% over the last five years. Several key factors have driven this performance. Notably, Amazon's earnings have grown significantly over these years, particularly evident in 2024, where their net income doubled compared to the previous year, reaching US$59.25 billion. Additionally, Amazon's continued revenue growth, including a rise to US$637.96 billion for 2024, supported this positive trajectory.

Amazon has consistently expanded its business, including significant product and client announcements, such as DigiCert's solutions being made available on AWS Marketplace, supporting its growth in cloud computing. However, challenges such as labor disputes, including major worker strikes, and legal challenges like the FTC’s complaint over Prime cancellations have been concurrent influences. Despite these, Amazon's performance in the past year exceeded the broader US market, which returned 7.5% over the same period, underscoring its resilience in a competitive environment.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NasdaqGS:AMZN.

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