1 Growth Stock Down 20% to Buy Right Now

The market is suffering under the weight of President Donald Trump's tariffs on trading partners, as investors try to understand how they'll affect companies.

One growth stock that's fallen hard this year is Amazon (NASDAQ: AMZN), which is down 20% year to date, as of this writing. That fall is causing some investors to wonder whether it might be a good time to pick up shares, or if it's best to avoid the company during this uncertain time.

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Here's why I think now could be a good time to buy Amazon stock.

Image source: Amazon.

One way it will get more difficult for Amazon

It's worth mentioning that Amazon isn't immune to the tariffs. Nearly 25% of the products sold on Amazon come from China. As of this writing, the U.S. has placed a 34% tariff on Chinese goods, on top of a 20% duty previously in place.

Amazon holds about 40% of the e-commerce market in the U.S., but it also has a substantial international footprint, with e-commerce marketplaces in more than 20 countries and shipping to more than 100 countries. So whether it's U.S. sellers that offer products made internationally or international sellers offering products in their own countries, Amazon's global marketplace is likely to be affected by the tariffs if they remain in place.

How Amazon's business may actually benefit

While prices of some goods will no doubt increase on Amazon's platform, the company could also benefit from a new executive order President Trump signed that removed a previous exemption. The de minimis exemption allowed inexpensive international goods to come into the country without U.S. Customs and Border Protection scrutiny and without tariffs.

That previous exemption helped cheap goods pour into the U.S. via China-based platforms Shein and Temu. Those platforms were able to undercut some of Amazon's prices, which led Amazon to launch its own lower-priced marketplace, Amazon Haul, to try to compete. With Shein and Temu no longer able to enjoy those benefits, Amazon could benefit from lower competition.

I think it's also important to point out that even during difficult economic times, and even amid high inflation, Amazon's marketplace has grown. In the first year of the COVID-19 pandemic, Amazon's sales increased 22%, and through the 2008 financial crisis, its revenue jumped 29%.

That doesn't mean the same will happen with tariffs in place, but it does show that Amazon has weathered difficult times in the past and come out ahead.

The secret of Amazon's growth

While Amazon is best known for its e-commerce platform, Amazon Web Services (AWS) is actually its most profitable segment. AWS generated $39.8 billion of operating income in 2024, compared to $25 billion from its North American e-commerce sales.

AWS holds a dominant 30% of the global cloud computing market share, compared to 21% for Microsoft and just 12% for Alphabet.

Cloud computing demand is on the rise, especially amid the development of artificial intelligence applications and more companies looking to add AI into their workflows. Goldman Sachs estimates that AI cloud revenue could reach $2 trillion by 2030, and Amazon, with its leading position, is perfectly positioned to benefit.

Amazon's trading at a discount, but expect more volatility

With Amazon's recent share price dip, the company's forward price-to-earnings multiple is about 26, down from about 42 this time last year. That means the stock is relatively cheaper than it was about a year ago, giving investors a chance to grab shares at a discount.

It's important to note that the tariff uncertainty will likely continue to cause volatility in the market. If there's a reversal on tariffs or significant trade deals are made, stock prices could surge higher. But even if the tariffs remain in place, Amazon's dominance in e-commerce and its long-term prospects in cloud computing still make it a great stock to own for the long term.

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*Stock Advisor returns as of April 5, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Goldman Sachs Group, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.