Stocks to Watch Amid Tariff Uncertainty: Amazon & Philip Morris

Investors are urged to navigate a volatile market post-10% drop, eyeing stocks like Amazon and Philip Morris. While Amazon adjusts to tariff pressures, Philip Morris thrives with growing non-cigarette products.

Date: 11-04-2025

AI Rating: 8

**Market Scrutiny Amid Tariff Turmoil**
The report highlights increased market volatility, particularly with a recent downturn of 10%. Investors are advised to be cautious due to potential impacts from tariffs introduced by the Trump administration. Notably, significant discussions around tariffs are particularly relevant to Amazon (NASDAQ: AMZN) and its competitive landscape. While the hurried imposition of tariffs may harm profitability for many companies, Amazon stands to benefit from weakened pricing power of cheaper competitors like Temu and Shein. Tariffs on these goods will effectively raise costs for consumers, potentially catapulting Amazon into a more favorable market position.

**Earnings and Revenue Insights on Amazon**
In its cloud computing division, Amazon Web Services (AWS) is responsible for a distributed 58% of the company’s operating income. AWS has shown remarkable growth with a revenue increase of 19% in the last quarter. Furthermore, Amazon's use of AI technology appears to fuel operational efficiency, indicating a positive trajectory for profit margins.

The forward price-to-earnings (P/E) ratio is notably attractive at 27.5, signaling a bargain for prospective investors. Such operational efficiency and revenue growth, alongside a strong market position, add weight to Amazon's bullish outlook despite the looming threats from tariffs.

**Philip Morris International's Strategic Advantages**
Contrasting with Amazon, Philip Morris International (NYSE: PM) appears well-positioned in a potentially adverse market environment, primarily due to its lack of dependence on the U.S. for cigarette sales and its focus on an expanding non-tobacco product line. The booming growth in their tobacco-free product, Zyn, is notable, with impressive shipment volume increases (46% last quarter and anticipated 53% for 2024). This growth is indicative of both robust demand and strong profit margins, substantially mitigating risks associated with fluctuating tariffs.

The company's modest 21 forward P/E ratio coupled with strong pricing power suggests a favorable investment perspective. Philip Morris's defensiveness and robust unit economics position it as a reliable player in a tumultuous market, enhancing its stock appeal against a backdrop of uncertainty.

Stocks: AMZN PM