Amazon (NASDAQ: AMZN) has seen its shares decline nearly 20% in the past 30 days amid recession fears, as the U.S. unemployment rate rose to 4.3% in July, which could adversely impact its consumer-driven business model. Despite this downturn, the company reported a second-quarter revenue of $148 billion, a 10% year-over-year increase, primarily from North American and international e-commerce growth. Operating income surged 59% to $5.1 billion in North America, and the international segment rebounded from a $900 million loss to a $300 million profit.
Looking forward, analysts from Statista estimate a 52% chance of a U.S. recession by May 2025, which may constrain spending on discretionary items. However, Amazon’s cloud computing segment, Amazon Web Services (AWS), is experiencing growth, with segment revenue rising 19% year-over-year to $26.3 billion. The operating income for AWS increased 72% to $9.3 billion, fueled by demand for generative AI services. Despite these positive indicators, Amazon’s stock trades at a forward price-to-earnings (P/E) multiple of 35, above the NASDAQ 100 estimate of 28, signaling potential caution for investors.
