Down 13% in 1 Month, Is Amazon a Buy, or Is the Worst Still to Come?

Amazon shares have dropped 13% over the past month, sliding into correction territory as investors digest the company's $200 billion capital expenditure commitment. Despite the pullback, valuation metrics and recent growth figures suggest the selloff may have overshot.

The stock now trades at a price-to-earnings ratio of 28, below the S&P 500's average multiple of 32. That's a notable discount for a company that posted 17% net sales growth and a 77% surge in net income during Q1. AWS, Amazon's cloud computing division, delivered 28% revenue growth in the quarter—nearly double the 16% expansion rate for the broader cloud industry.

The $200 billion capex plan, largely earmarked for AI infrastructure and fulfillment networks, remains the primary investor concern. The spending timeline and return profile will determine whether the current multiple expands or contracts from here.