Amazon stock finished this week higher than it started — breaking its longest weekly losing streak since 2008. Still, there is much uncertainty for shares of the tech giant as Wall Street weighs what President Donald Trump's tariff plans mean for Amazon's e-commerce and cloud-computing empire.
Amazon stock gained 2% to close at 184.87 on the stock market today. Shares gained 8% overall this week, powered by a 12% rally Wednesday when Trump paused his plan for "reciprocal" tariffs on all countries for 90 days, with the exception of China.
Amazon shares had fallen nine consecutive weeks. That marked the longest losing streak for the stock on its weekly chart since 2008, according to an analysis of MarketSurge data.
After Wednesday's big rally, Amazon gave back some gains with a 5% slide Thursday. That reflects the uncertainty for Amazon and tech giants more broadly, particularly as the trade war between China and the U.S. has only escalated.
Trade War Risk For AI Demand
For Amazon's profit-generating cloud computing business, analysts believe uncertainty could hamper enterprise AI adoption.
"We estimate that 10%-15% (could be conservative) of many cloud and AI initiatives in the U.S. we are tracking in the field could be pushed/slowed down during this period of uncertainty and Magnificent Seven names will be front and center in this economic period of uncertainty," Wedbush analyst Dan Ives wrote in a client note Friday.
That concern comes as Amazon expects to spend $100 billion this year on capital expenditures, focused on building data centers to handle AI demand. Cloud rivals Microsoft and Alphabet are also spending big.
Mizuho analyst James Lee on Thursday lowered his price targets for both Google stock and Amazon, citing the "softness to come" for enterprise cloud spending. He reiterated an outperform call for both stocks, however.
"Over the long-term, we remain bullish on cloud computing, but it could take a few quarters for customers to assess the new environment," Lee wrote Thursday.
In a shareholder letter Thursday, Amazon Chief Executive Andy Jassy defended the company's big AI spending plans.
"We continue to believe AI is a once-in-a-lifetime reinvention of everything we know, the demand is unlike anything we've seen before, and our customers, shareholders, and business will be well-served by our investing aggressively now," Jassy wrote.
Amazon Stock: What China Tariffs Mean For E-Commerce
Meanwhile, Trump's tariffs are likely to raise costs for Amazon shoppers. Jassy told CNBC Thursday that Amazon had made strategic inventory purchases ahead of the tariffs for some items. But marketplace sellers are likely to pass on higher costs to consumers.
"I mean depending on which country you're in, you don't have 50% extra margin that you can play with," Jassy said in a televised interview. "So I think they'll try and pass the cost on. It's so early right now, but we haven't seen any change in consumer behavior in a meaningful way yet."
Somewhere between 30% and 40% of products sold on Amazon likely come from China, according to JPMorgan estimates. JPMorgan analyst Doug Anmuth cut his price target for Amazon stock to 220, from 270, in a client note Tuesday.
However, Anmuth noted that Amazon has gained retail market share during previous economic slowdowns and could do the same if the U.S. economy enters a recession this year.
Amazon moved to diversify its supply chain following 2018 and 2019 tariffs on Chinese products, Bernstein analysts wrote to clients Friday. Bernstein analysts Nikhil Devnani and Mark Shmulik, who rate Amazon a positive overweight, also believe the company can adapt quickly.
"(Amazon) has the ability to lay the groundwork and get an initial trade route going in a matter of weeks, and then scale it up in three to four months," the Bernstein analysts wrote Friday. "Scale allows Amazon and others to do this quicker than your average retailer — i.e., demand aggregation is a powerful reinforcing mechanism."
Amazon Stock Below 200-Day
The current slump for Amazon stock began with its fourth-quarter results in early February. Amazon beat earnings estimates but offered a lower-than-expected sales forecast for Q1. Shares have tumbled 26% from a record high of 242.52 reached Feb. 4.
Amazon stock tumbled below its 200-day moving average late last month and remains well below the long-term trendline.
