Tariffs crushed Amazon’s stock price on Thursday. Here’s why you should see this discount as a wide-open buying window for this resilient tech stock.
Trump’s tariffs brought the stock market to its knees on Thursday. The introduction of profit-sapping importation fees drove the S&P 500 (^GSPC -4.84%) to close almost 5% lower.
As a leading seller of imported goods, e-commerce giant Amazon (AMZN -8.89%) took a particularly hard hit. The stock closed the day down 9%. Amazon’s share price is back where it was a year ago, erasing 2024 gains of more than 30%. Following along with Wall Street’s general trend, Amazon’s price drop started in February and accelerated as the tariff threat evolved from a threat to a real policy.
But this ain’t Amazon’s first rodeo, and it won’t be the last by a long shot. Here’s why I see this price drop as an open invitation to buy more Amazon stock at a discounted price.
Amazon’s history of dramatic (but temporary) price dips
You might recall some classic Amazon price drops of the past. Here’s a memory-jogging price chart from the start of 2008 to April 3, 2025. The S&P 500’s total return is included as a comparative courtesy. Don’t worry — there won’t be a quiz:
AMZN Total Return Level data by YCharts
The more recent mega-cuts are pretty easy to see. For example, a couple of disappointing earnings reports led to price drops of 8.8% on Aug. 2 last year and 8.4% on Feb. 3, 2023. Another earnings miss resulted in a 14.1% single-day plunge on April 29, 2022.
You’re with me so far, right?
And who can forget the start of the COVID-19 lockdowns? Amazon’s stock price crashed 22% lower in about a month, including several large single-day drops. That one is squeezed in between a bullish earnings report and a quick recovery, right after the 2020-year marker. I’m sure you can find it.
What about the four consecutive earnings misses in 2014? Zoom in just before the 2015 divider, and you should see four one-day price cuts ranging from 8.4% to 11% in that year. The full-year trend is probably easier to spot than those specific corrections.
I drew that graph all the way back to 2008 so you could see how the infamous subprime mortgage meltdown affected Amazon’s stock price. You might need a microscope, but the data is there. There were too many quick price drops to mention them all here (and a couple of quickly erased rebounds along the way), but I’m talking about a 36.3% value loss from Sept. 16 to Oct. 16. The S&P 500 lost 23.2% in the same period.
The subprime stuff was quite scary at the time. The market took years to recover from that economic disaster. Amazon, on the other hand, righted the proverbial ship before the end of 2009 and nearly doubled in value in the three-year span starting on Jan. 1, 2008.
AMZN Total Return Level data by YCharts
Patience pays when you’re playing the long game
In other words, Amazon has a proven ability to come back from large price drops and prove the doubters wrong. And in the end, longtime Amazon investors shouldn’t worry too much about exactly when they picked up the stock.
If you invested $10,000 in Amazon on New Year’s Day 2007 and never touched that position again, you’d have $388,000 in your pocket today. Sure, you could have tripled your profit to a cool $1 million by timing the subprime mortgage crash perfectly, but there’s more luck than skill in that game. Impossible perfection will always be best, but even the worst possible Amazon investment in 2008 would have delivered game-changing returns by now.
It’s not easy to find that 36% price drop on the chart. The tariff terror of 2025 will eventually fade into just another forgettable chart squiggle. The main thing to remember is that Amazon’s start-up-like mentality and willingness to pursue new business ideas should keep the stock ahead of Wall Street’s broader trends in the long run.
Why I’m clicking buy while others panic
When the market makers give you a bargain-bin price point, you should at least consider taking advantage of it. This probably isn’t the exact market bottom, and it’s perfectly fine to settle for a pretty decent discount. Nobody gets the timing perfectly right.
I like my metaphors mixed, and time in the market heals all wounds for Amazon investors. I’ll gladly hold on to my Amazon shares, and might even pick up some more while the discount lasts.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
