Why Amazon, Walmart, and Target Stocks Dropped More Than 10% in March

Amazon (NASDAQ: AMZN), Walmart (NYSE: WMT), and Target (NYSE: TGT) stocks all fell more than 10% last month according to data provided by S&P Global Market Intelligence. The market's been down on tariff talks and moves, and the S&P 500 dropped 5% in March. Since these mega-retailers could be strongly impacted by changes in tariffs, they're falling faster.

More economic pressure

The market is on edge in preparation for President Donald Trump to release his complete tariff plan and in expectation of what the fallout could be. Out of the three stocks here, only Target doesn't have international operations. Amazon and Walmart both have extensive international operations, but Target has exposure to the tariff plan through its imports.

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Out of the three, Target lost the most -- 16%. It's already been struggling for years as different economic measures keep dealing it more blows. Most recently, it's struggling through decreases in discretionary spending. Unlike some of its peers, Target's focus is less on grocery and more on discretionary categories like housewares where customers are still holding back. It's having trouble generating higher sales and also with profitability, and new tariff actions could worsen the situation. In fiscal 2025 (ended Feb. 1), comparable sales inched up 1%, but earnings per share (EPS) dropped 19%. It recently released a strategic overhaul, doubling down on its main categories with new styles and selection, as well as its best-in-class omnichannel shopping options. These are the traditional features it relies on for growth, but they rely on improving economic conditions. It may not pan out as planned if external forces play an increasing role.

Amazon and Walmart, which lost 10.4% and 11% respectively last month, are both performing well, but investors might be worried about where they're headed. Amazon has many other businesses outside of retail that could shield it from an exorbitant impact of tariffs, specifically Amazon Web Services (AWS) and its burgeoning generative artificial intelligence (AI) business. AWS sales increased 19% last year, driving higher company sales growth of 11%.

As the largest U.S. company by sales with a large focus on consumer staples, Walmart could also be relatively cushioned from the impact. Sales increased 5.1% in fiscal 2025 (ended Jan. 31), and EPS was up 13%. It's a large player in grocery, and it's become increasingly successful in its e-commerce division, using its nearly 5,000 U.S. stores as distribution and delivery hubs. It owns retail chains in several international locations and has close to 11,000 total global stores. However, like the other retailers here, its U.S. stores are reliant on imports for many products.

Top stocks to buy on the dip

Any of these stocks could be a great addition to your portfolio. Amazon provides exposure to AI along with the security of its unmatched e-commerce business, Walmart is the solid value play that's still the largest company in the world by sales, and Target is the turnaround play.

At their lower prices, Amazon and Target stocks are currently trading at a discount to their average P/E ratios, and near five-year lows. Walmart, interestingly, isn't cheap by its average standards even as its price is coming down.

AMZN PE Ratio data by YCharts

All of these companies are likely to be able to absorb the impact of tariffs, and their stocks should make a strong comeback. If you have a high risk tolerance, you might want to buy Target stock right now, and if you don't, you might want to consider Walmart or Amazon.

However, there could be continued short-term disturbances as these companies operate against a volatile economic backdrop, and investors shouldn't expect immediate gains. Long-term, they can provide incredible growth opportunities for the patient investor.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Amazon, Target, and Walmart. The Motley Fool has a disclosure policy.