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Should You Buy AMZN Stock At $195 After Landmark U.S.–U.K. Trade Deal?
Should You Buy AMZN Stock At $195 After Landmark U.S.–U.K. Trade Deal?

Forbes

time09-05-2025

  • Business
  • Forbes

Should You Buy AMZN Stock At $195 After Landmark U.S.–U.K. Trade Deal?

(NASDAQ:AMZN) stock price is currently trading 20% below its February peak of over $240. This decline followed the imposition of tariffs by President Trump on several of the U.S.'s trading partners. Since then, the government has been actively pursuing new trade agreements, most recently achieving a landmark deal with the UK. The specifics of the U.S.-UK agreement indicate that the U.S.'s baseline 10% tariff is likely to persist for most other trading partners, with minimal exceptions. However, the exemption of steel and aluminum from tariffs in this deal suggests a greater willingness to negotiate sectoral tariffs than previously anticipated. This flexibility in the U.S.-UK deal could also foster some optimism that a trade agreement with China, a crucial factor for companies like Amazon given the significant volume of Chinese goods sold on its platform, could eventually be reached. Although Amazon undoubtedly faces inherent risks that could exert downward pressure on its stock, it's also plausible that some of these potential headwinds are already factored into the current price. Our positive assessment of Amazon's stock stems from a comparative analysis of its present valuation against its recent operating performance, as well as its current and historical financial standing. Our evaluation of across crucial dimensions—Growth, Profitability, Financial Stability, and Downturn Resilience—reveals a robust operating performance and a sound financial condition, as elaborated below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative - having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Also, see – Google's $1 Trillion Problem: Stock To Crash 40%? Going by what you pay per dollar of sales or profit, AMZN stock looks slightly expensive compared to the broader market. Revenues have seen notable growth over recent years. profit margins are around the median level for companies in the Trefis coverage universe. balance sheet looks strong. AMZN stock has seen an impact that was slightly better than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on AMZN stock? Our dashboard How Low Can Stock Go In A Market Crash? has a detailed analysis of how the stock performed during and after previous market crashes. In summary, performance across the parameters detailed above are as follows: Considering the company's robust performance across the aforementioned key areas, coupled with a seemingly reasonable valuation of 3.2 times its trailing revenues, we believe that AMZN stock appears to present an attractive investment opportunity. While it looks like there is upside to AMZN stock, the Trefis Reinforced Value (RV) Portfolio, has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

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