Amazon.com (NasdaqGS:AMZN) Eyes TikTok Takeover as Share Price Dips 3%

Amazon.com (NasdaqGS:AMZN) has been in the spotlight with its recent bid to acquire TikTok amid a shuffle in app ownership discussions propelled by national security concerns. Despite this significant move, the company's stock price dipped 2.55% over the past week. This decline coincides with broader market pressures from the imposition of new U.S. tariffs under President Trump's administration, which have affected several tech stocks that depend on international trade. Alongside Amazon, other major tech companies faced similar declines as the tech-heavy Nasdaq Composite dropped 4.7% due to investor worries about increased manufacturing costs and potential impacts on corporate earnings.

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Over the past five years, Amazon has delivered a robust total shareholder return of 91.88%, reflecting its sweeping developments and growth strategies. This period has been marked by Amazon’s substantial revenue increase, highlighted by its fiscal 2024 report, which saw revenues reaching US$637.96 billion. A noteworthy vertical expansion is evidenced by the growth of Amazon Web Services (AWS), which has capitalized on AI-driven technologies to fuel future earnings. Amazon’s advertising segment has also contributed signficantly, reporting a run rate exceeding US$69 billion annually, driving higher margins and profitability.

Despite these successes, Amazon has faced challenges, such as class-action lawsuits regarding alleged environmental misrepresentations and ongoing labor disputes that highlight internal organizational pressures. The recent bid to acquire TikTok and collaboration with Tata Power signify Amazon's efforts to diversify and strengthen its market presence. While the company's total return over the past year may have underperformed the Multiline Retail industry’s 13.3% growth, Amazon continues to adapt to shifting market dynamics.

According our valuation report, there's an indication that Amazon.com's share price might be on the cheaper side.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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