Amazon Stock Drops 12%, Expert Sees Opportunity Amid AWS Growth

Amazon's stock price has dropped about 12% since its record high of $284.02 in August, but one expert thinks this is an opportunity to buy.

The stock's decline can be attributed to a lawsuit filed by the Federal Trade Commission and 22 state attorneys general against Amazon over its ad auctions, which alleges that the company charged advertisers more than their winning bid around 80% of the time by 2024. However, Amazon disputes the claims and estimates that its method saved advertisers more than $8 billion from 2021 to 2025.

Despite this setback, Amazon's cloud computing unit, Amazon Web Services (AWS), continues to show strong growth, with revenue rising 37% year over year in the second quarter to $42.2 billion. This growth rate has been increasing every quarter for a year, from 17.5% in the second quarter of 2025 to 20%, then 24%, then 28%, and now 37%. AWS operating income also rose around 64% year over year to $16.6 billion.

Amazon's backlog (commitments in customer contracts not yet recognized as revenue, mainly tied to AWS) hit around $496 billion as of June 30, up from about $195 billion a year before. This suggests that demand for AWS is still rising and much of this demand is already under contract.