Amazon.com, Inc. (NASDAQ:AMZN) was down more than 5% on Monday as President Trump targeted the tech stock, saying that it is not paying its fair share of taxes. The president has been critical of the company in the past as well, although you wouldn't be able to tell it from the stock's strong performance. In the past year, Amazon's share price has risen by more than 50%, although it has dropped more than 8% in the past month.
However, despite the negativity that the company has received, the Trump presidency has not been bad for Amazon and tech stocks as a whole have performed well. Back when Trump was elected in 2016, Amazon's stock was trading around $750 and it would go on to double before hitting this recent decline.
U.S. tax reforms that were passed late last year will also help tech companies keep more of their money and that will only facilitate more long-term growth in the industry.
Amazon's valuation has already been soaring and so the stock may have been due for a dip in price anyway. Even with the decline in price, Amazon is still trading at a hefty premium with a price-to-earnings ratio of well over 200. However, when it comes to Amazon's stock, investors have ignored valuation multiples and have focused instead on the company's ability to innovate and expand into new product lines.
Investors shouldn't read too much into the president's recent criticism of Amazon, as tomorrow his focus could shift elsewhere and the stock will likely bounce back. Amazon remains a strong brand and company to invest in, it's just a matter of whether investors can justify the high price tag.
Tech Insider
