Amazon Stock: 2 Experts Argue Pros and Cons of ‘Buying the Dip’ Amid Trump Tariff Drama
Written by
Marc Guberti
Edited by
Jenna Klaverweiden
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Amazon (AMZN) has become the go-to resource for buying various products. It’s more convenient to have items delivered to your house than to go to retail stores, and that selling point has been a boon for the company.
The tech giant has a $1.9 trillion market cap, but e-commerce isn’t its only tailwind. Amazon Web Services acts as the digital infrastructure for many corporations, and that’s been a high-margin segment that continues to grow.
Despite the strong demand for Amazon and its attractive long-term gains, some investors are worried about President Donald Trump’s tariffs and how they could affect the company and its stock. As of April 10, 2025, Amazon stock is down about 17% for the year.
Now may be a good time to assess the pros and cons of buying the dip in Amazon stock. Here’s what experts had to say about buying Amazon stock.
Amazon’s E-Commerce Segment Could Take a Hit
Stephen Callahan, a trading behavior analyst at Firstrade Securities, mentioned that Amazon’s sales could be hit due to the high tariffs placed on China.
“Amazon is heavily dependent on goods sold by third-party merchants in China. These tariffs will probably cause the costs for a large proportion of Amazon’s international inventory to dramatically increase in price. Higher prices could affect Amazon’s sales significantly, especially if consumers cut back on spending,” he said. “Amazon has international operations in 130 locations. Tariffs could cause significant upheaval in its services business. This combination may add additional volatility to the stock price in the near term.”
Amazon’s profit margins may take a hit, and it’s also possible that sales could go down due to the tariffs. Some sellers may no longer be able to sell their products on Amazon due to losing their profit margins.
President Trump seems committed to maintaining high tariffs on China. Even when he announced a 90-day pause for most countries, he used the opportunity to raise Chinese tariffs higher. While the 90-day pause is a good development for stocks, the elevated tariffs on China remain a concern.
Any deal surrounding Chinese tariffs could send Amazon soaring, but both sides seem committed to waiting for the other to blink first.
Amazon Web Services Will Likely Remain Strong
Although e-commerce sales may be negatively affected by tariffs, Daniel Newman, CEO of The Futurum Group, has a different perspective on Amazon Web Services.
“Its AWS business is the bulk of its operating margin. Those contracts are generally longer term and have a very high margin. Companies will struggle to quickly pull away from cloud commitments, and this anchors the company,” he said.
Cloud computing has been a key growth driver for Amazon. Growth in this segment could compensate for declining e-commerce sales.
However, Newman expressed caution about Amazon’s e-commerce and ad segments. “The commerce and ads business will be more touch and go based upon how much Main Street and consumers are impacted by the ongoing uncertainty,” he said.
On one hand, the stock could experience short-term volatility due to the tariffs. But if it can weather the storm and keep its business strong, it may be a good idea to buy the dip. However, it ultimately remains to be seen what will happen with tariffs and Amazon’s stock.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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