Amazon Stock Slumps Amid Cloud Computing Dominance

Amazon's stock has underperformed the market in recent months, but its dominant positions in cloud computing and online retail may make it an attractive buy. The company commands a large share of the online retail marketplace, including nearly 36% of U.S. e-commerce sales in 2025.

AWS continues to grow its sales rapidly, with a 36.8% year-over-year gain in the second quarter to $42.2 billion, driving a 63.6% increase in operating income to $16.6 billion.

The sluggish stock price movement has created a better valuation for investors, with the price-to-earnings (P/E) ratio dropping from 35 to 22 over the last year. This is less than half the five-year median of 50 and compares favorably to the S&P 500's P/E ratio of 29.