Market Sell-Off Affects Nvidia and Amazon Stock Prospects

Market Concern: Stock prices for major companies like Nvidia and Amazon are under pressure due to economic uncertainty. A significant drop in share prices is noted, particularly in Nvidia and its data center business amid recession fears.

Date: 12-03-2025

AI Rating: 5

**Market Overview:** The stock market has had a turbulent beginning to 2025, with the Nasdaq Composite index experiencing a decline of over 10% year to date. Concerns about President Trump's tariff policies contributing to a potential recession are likely influencing this downturn.

**Nvidia Analysis:** Nvidia (NASDAQ: NVDA) has seen its stock price fall by 20% this year due to worries over potential reductions in data center spending in 2025. Despite this, the company experienced significant revenue growth, with revenue doubling last year to $130 billion, primarily from data center sales. While the impact of tariffs is uncertain, the long-term outlook for Nvidia remains strong due to growing investments in AI and data centers. Currently, Nvidia’s price-to-earnings (P/E) ratio stands at 24, which is comparatively lower than the average P/E of 28 for the S&P 500, indicating it may be undervalued at present.

**Amazon Analysis:** Amazon (NASDAQ: AMZN) continues to hold a leading position in the $4 trillion e-commerce market. Its cloud computing segment, Amazon Web Services (AWS), saw a year-over-year revenue increase of 19%, contributing significantly to the company's profitability. Despite potential downturns in corporate spending due to economic conditions, AWS generated $115 billion in annualized revenue, highlighting its status as a profit driver. Amazon's operational cash flow increased by 36% to $116 billion last year. The stock is trading at 18 times trailing cash from operations per share, below its previous average of 25, suggesting good long-term value for investors.

Stocks: NVDA AMZN