What Happened?
Shares of cloud computing and online retail behemoth Amazon (NASDAQ:AMZN) fell 2.2% in the afternoon session after the U.S. announced potential tariffs on several European countries.
The sell-off was a reaction to news that the White House planned to impose a 10% tariff on imports from eight European nations, including France, Germany, and the United Kingdom, starting February 1. Reports indicated the tariffs were intended to pressure Denmark over the potential sale of Greenland to the U.S. and could rise to 25% if a deal was not reached.
The announcement caused a significant downturn in U.S. stocks, with the S&P 500 and Dow Jones falling more than 1.4% as investors returned from a holiday weekend and reacted to the heightened trade uncertainty.
The downturn was further exacerbated by a spike in Treasury yields. Higher rates particularly hurt growth stocks such as tech names since investors must discount financials further out in the future back to the present.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Amazon? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Amazon’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 10.4% on the news that the company reported third-quarter results that surpassed Wall Street's expectations, driven by strong growth in its cloud computing division.
Amazon's net sales rose 13.4% from the previous year to $180.2 billion, beating estimates, while earnings per share came in at $1.95, also well above analysts' forecasts. A key highlight was Amazon Web Services (AWS), the company's cloud unit, where sales growth accelerated to 20%, a rate not seen since 2022, reaching $33.01 billion. This strong performance from its most profitable division reassured investors.
Additionally, the company's advertising business continued to show robust growth, with revenue increasing by 21.4% year-over-year. The positive results across key segments, particularly the acceleration in AWS, signaled healthy demand for the tech giant. Operating profit missed, but excluding two one-time charges, it would have beaten, and the market appeared to understand this. Overall, this print featured some key positives.
Amazon is up 2.6% since the beginning of the year, and at $232.35 per share, it is trading close to its 52-week high of $254 from November 2025. Investors who bought $1,000 worth of Amazon’s shares 5 years ago would now be looking at an investment worth $1,424.
While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report, it’s free.
