Is Amazon Stock Undervalued? What Wall Street Isn’t Telling You

When growth stocks pull back and tech valuations start to look shaky, Amazon (AMZN) quietly reminds long-term investors why it’s a powerhouse—not just a hype play.

With strong earnings, rising AWS and ad revenues, and a rare valuation reset, Amazon might not just be bouncing back—it might be on sale.

But with tariff risks and market uncertainty looming, is this the right time to buy—or just another tech trap?

Let’s break it down using the Invest Diva Diamond Analysis (IDDA) framework: Capital, Intentional, Fundamental, Sentimental, and Technical Analysis.

IDDA Point 1 & 2: Capital & Intentional

Before investing in Amazon, ask yourself:

✅ Are you looking for long-term growth from a reliable tech giant?

✅ Are you okay with short-term price swings to gain long-term value?

✅ Do you believe in the future of e-commerce, AI, and cloud services?

If you said yes to these, Amazon might align well with your investing goals—especially if you’re looking to buy high-quality companies when they’re temporarily undervalued.

Don’t know your risk tolerance? Get Kiana Danial’s risk management toolkit for free here.

IDDA Point 3: Fundamental

Amazon is more than just an online shopping platform—it’s a global tech and infrastructure powerhouse. From e-commerce and cloud computing to advertising, logistics, and AI, Amazon operates across industries that shape the backbone of modern life.

While headquartered in the U.S., Amazon’s reach is worldwide, with three powerful growth engines driving its profits:

✅ AWS (Amazon Web Services) – powering much of the internet
✅ Advertising – now one of its fastest-growing segments
✅ Prime & E-commerce – still a global retail force

🔹Recent Performance Snapshot (Q1 2025):

• Revenue: $155.7B (vs. $155.1B expected)
• EPS: $1.59 (vs. $1.36 expected)
• AWS revenue: +17% YoY
• Ad services: +18% YoY
• Online store revenue: +5% YoY to $57.4B

🔹Amazon had a strong start to the year, showing it’s finally turning its past spending, especially in AI and technology into real profits. In the first quarter, Amazon made more money overall, with sales up 9% and profits up 20% from last year. Its cloud business, AWS (Amazon Web Services), was especially impressive, reaching its highest profit margins ever. This shows Amazon is becoming more efficient and profitable across its major businesses.

🔹AI is becoming a major growth engine for Amazon. Tools like the improved Alexa and new shopping features like “Buy for Me” show how Amazon is using AI to improve the customer experience and open up new ways to make money. AWS is also helping businesses around the world adopt AI, and this side of Amazon is expected to become even more valuable in the future.

🔹Even though there are global risks, Amazon is managing them well. The company is protecting itself from tariffs and supply chain issues by sourcing from other countries and building its own tech components. While there are some risks from global politics and economic uncertainty, Amazon’s strong planning and use of AI could actually help it benefit from future global economic growth.

In short, the company’s profits are growing, it’s making smart use of AI, and it’s in a strong position to benefit from big economic trends. While there are some risks, Amazon’s ability to adapt and lead in technology makes it a strong long-term investment.

IDDA Point 4: Sentimental 

Bull Case for Amazon 

✅Strong Profit Growth

• Operating income rose 20% YoY; operating margin expanded to 11.8%.
• AWS hit a 39% profit margin—its best in 10 years.

✅AI Integration Paying Off

• AI is boosting both consumer tools (like Alexa+ and “Buy for Me”) and enterprise solutions through AWS.
• AWS is growing into Amazon’s crown jewel, with AI driving higher-value services.

✅Operational Agility and Diversification

• Amazon is shifting suppliers away from China and building resilience into logistics and sourcing.

Bear Case for Amazon

❌Geopolitical and Trade Risks

• Exposure to semiconductor supply chain issues in China/Taiwan.
• Potential tariffs and export restrictions could affect operations.

❌Dependence on Continued AI Execution

• The bullish thesis relies heavily on successful, profitable AI integration—execution risk remains.

❌Cautious guidance – Lower-than-expected forward guidance has raised concerns about near-term growth momentum.

Current Market Sentiment:

• Short-term traders are reacting to the softer outlook, driving recent price volatility.
• Long-term investors, however, view this as a potential buy-the-dip moment, with strong fundamentals and multiple growth engines intact.

Despite the political uncertainty, especially around tariffs in a possible second Trump term, sentiment among serious investors is turning increasingly bullish.

Want our top stock picks and analysis every month? Get our monthly newsletter here.

IDDA Point 5: Technical

On the weekly chart, AMZN showed a 🟢 strong uptrend through most of 2024, but began to 🔴 pull back in early 2025. 

🔻 Recently, the Kijun line has crossed below the Tenkan line, forming a bearish crossover (death cross)—an early signal of potential downward momentum.

🟢 The last few candlesticks showed the stock was trading within the Ichimoku Cloud, with the lower band currently acting as support. If this support holds, the bearish momentum could be short-lived, and we may see a potential rebound in the coming weeks.

Over the past few weeks, the price has been oscillating between the 61% and 78% Fibonacci retracement levels.

Investors looking to get into AMZN can consider the following buy limit levels:

📌$186.56 (High Risk Entry)

📌$171.36 (Medium Risk Entry – ideal for cautious buyers)

📌$151.64 (Low Risk – deep discount zone)

Here are the Invest Diva ‘Confidence Compass’ questions to ask yourself before buying at each level:

1. If I buy at this price and the price drops by another 50%, how would I feel? Would I panic, or would I buy more to dollar-cost average at lower prices?

2. If I don’t buy at this price and the market suddenly turns around and starts going up again, will I beat myself up for not having bought at this level?

Remember: Investing is personal, and what is right for me might not be right for you. Always do your own due diligence. You should ONLY invest based on your own risk tolerance and your timeframe for reaching your portfolio goals

Final Thoughts on Amazon

Amazon is far more than an online retailer—it’s a global tech titan with powerful growth engines in cloud computing (AWS), advertising, and Prime/e-commerce.

Despite beating Q1 2025 earnings expectations with $155.7B in revenue and strong year-over-year growth in AWS (+17%) and ad services (+18%), the stock dipped due to cautious forward guidance and rising political risk around potential tariffs. 

Technically, AMZN is showing early bearish signals with a death cross on the weekly chart, but it remains above key support within the Ichimoku Cloud and sits near the 61% Fibonacci retracement level.

For long-term investors focused on quality, scale, and profitability, current weakness may present one of the most compelling buying opportunities in years.

Want to become a self sufficient Triple Compounder who no longer needs to read this blog? 

Attend this free Triple Compounding Training here 👇👇

If you enjoyed my blog post about the ‘Is Amazon Stock Undervalued? What Wall Street Isn’t Telling You’, you’ll love my post on ‘Texas Instruments Stock in the Age of AI: Still a Reliable Long-Term Investment in 2025?’

Disclosure: I am not a financial advisor, and this is not financial advice. This information is for educational purposes only. This post about  ‘Is Amazon Stock Undervalued? What Wall Street Isn’t Telling You’ may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please see the terms of service page for more information.