Amazon (AMZN 0.91%) might be a $2.7 trillion company with a gargantuan 2025 net sales base of $717 billion. However, it's still exposed to unpredictable economic forces, like tariffs. It's been just over one year since President Trump's "Liberation Day" tariff actions in early April 2025.
What's more, volatility still impacts even the most valuable businesses, including this one. The "Magnificent Seven" stock is on a hot streak right now, soaring 25% since March 27 (as of April 16). But in the first half of February, shares tanked after the company revealed its $200 billion capital expenditure plan for 2026.
Tariffs and volatility are on the minds of Amazon shareholders. In the face of these variables, is this business still a long-term buy?
Image source: The Motley Fool.
Amazon's retail operations are performing at a high level
Over the past year or so, tariffs have been a major driver of uncertainty, particularly among retailers. Amazon, with its massive online and physical presence, has had to navigate during a time of constant change with trade policy. The business has performed well.
To deal with the tariff situation, Amazon and its sellers pre-purchased inventory last year. They've shifted supply chains. Sellers have also been forced to absorb any cost pressures.
But the retail segment overall has been humming along, probably since it's difficult for consumers to change their behavior since they rely so much on the convenience, massive selection, and pricing Amazon offers. Revenue for online stores, physical stores, and third-party seller services rose 9%, 7%, and 10%, respectively, in 2025 on a year-over-year basis.
Even though Amazon built itself on the early success of its e-commerce operations, the retail segment today might be an underappreciated part of the empire, given all the attention directed to Amazon Web Services and the company's ambitions in space. The growth can continue for a very long time. In the U.S., for example, physical shopping still accounts for more than 80% of the overall retail sector. Not all commerce will move online, of course, but there is no doubt potential for durable growth in the long run.
NASDAQ: AMZN
Key Data Points
Investors should try to take advantage of changing market sentiment
Long-term investors understand that volatility can't be avoided. The cost of putting your portfolio in a position to achieve strong investment gains is to stomach the inevitable ups and downs. This is true even of the largest businesses, like Amazon.
When the stock was trading 22% off its peak in late March, investors were staring at a fantastic opportunity to buy one of the highest-quality companies on the face of the planet. At the time, shares traded at 15.5 times 2025 operating cash flow. Today, that multiple has expanded to 19.1.
I still believe investors should consider buying Amazon stock. It could produce a solid return over the next five years and beyond.
