As Amazon (NASDAQ: AMZN) stock continues to face increased volatility, with shares plunging after the Q4 2025 earnings report, analysis indicates the equity has dropped to its lowest valuation ever.
As of press time, AMZN shares were trading at $207, down 0.43% on the day, while over the past month, Amazon shares have fallen more than 15%.
Amazon’s stock dropping valuation
Notably, analysis shows Amazon’s trailing price-to-earnings ratio has declined to roughly 29x, marking the lowest valuation the company has recorded in its public market history.
This represents a sharp contrast to prior cycles when Amazon routinely commanded triple-digit earnings multiples, even during periods of slower growth.
In this line, TrendSpider analysis shared on X on February 9 shows that over the past decade, Amazon’s valuation has often surged above 100x earnings, peaking near 350x during early growth phases and topping 150x during the pandemic rally.
Those spikes coincided with heavy reinvestment, margin pressure, or temporary earnings compression that inflated the P/E ratio.
By contrast, Amazon’s current valuation sits near the bottom of its historical range, at levels last seen when the company was much smaller.
Importantly, the stock is trading close to cycle highs, indicating the multiple compression reflects stronger earnings rather than a falling share price.
Since 2023, the stock has risen steadily while valuation has declined, pointing to improved profitability and operating leverage across cloud, advertising, and logistics.
This divergence suggests the market is applying a more conservative multiple to a business now generating steadier cash flows.
Historically, similar valuation lows have preceded periods of multiple expansion, leaving Amazon priced more cheaply than at any point in its history.
AMZN shares under pressure
Overall, Amazon shares have come under pressure after the company outlined sharply higher capital spending in its fourth-quarter 2025 earnings. The stock is down about 14% over the past five sessions as investors worry that heavy investment in AI and cloud infrastructure will weigh on near-term profitability.
Amazon posted solid revenue growth but mixed earnings. Net sales rose 14% year over year to $213.4 billion, while AWS revenue jumped 24% to $35.6 billion, supported by strong demand for cloud and AI services. Adjusted earnings per share came in at $1.95, slightly below expectations due to one-off costs.
The sell-off was driven by guidance calling for roughly $200 billion in capital expenditures in 2026, sharply higher than 2025 levels and above forecasts, with most spending directed toward AI infrastructure. Shares fell more than 10% after the release, prompting some analyst downgrades.Despite the pullback, Wall Street remains broadly constructive, with price targets still implying more than 30% upside.
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