<div id="readability-page-1">E-commerce is what Amazon (AMZN 2.66%) is known for, and that's been a factor in its stock's 1% decline this year through June 26. The S&amp;P 500 rose 4% in that time. The reason for this disparity is the current macroeconomic climate, clouded by the Trump administration's ever-shifting tariff policies, which inject concern on Wall Street about weakening consumer spending. After all, Amazon competitor Walmart announced that it would raise prices due to tariffs. But investors looking at the long haul know that these short-term headwinds will pass. In addition, Amazon possesses strengths that position its stock for future growth. Here are three reasons why the company is a good long-term investment. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjMxMDMvc2hvcHBpbmctb25saW5lLXdpdGgtYS1sYXB0b3AtZ2V0dHlpbWFnZXMtMTE3MTY4NDM2My5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjMxMDMvc2hvcHBpbmctb25saW5lLXdpdGgtYS1sYXB0b3AtZ2V0dHlpbWFnZXMtMTE3MTY4NDM2My5qcGcmdz03MDA"/>Image source: Getty Images. </div> <h2>Amazon's pricing strengths</h2> Amazon is the global leader in e-commerce by market cap, and its immense scale gives it significant leverage when negotiating with suppliers. By procuring products at favorable prices, the company can offer customers highly competitive deals. This kind of price flexibility is key in the current macroeconomic environment, where consumer spending is at risk of a slowdown. It enables Amazon to execute revenue-boosting opportunities such as its popular Prime Day deals. The company's 2024 Prime Day was its biggest shopping event at the time, and the next is scheduled for July. On top of that, Amazon's technological prowess further enhances its price strengths. The retailer uses dynamic pricing, which employs sophisticated algorithms to automatically adjust prices based on many factors -- such as inventory levels, competitor prices, and individual shopper behavior -- to incentivize a purchase. Amazon's first-quarter results demonstrate its ability to succeed despite economic headwinds. Q1 revenue rose 9% year over year to $155.7 billion. The company also expects sales to continue growing, projecting second-quarter revenue of between $159 billion and $164 billion, representing 7% to 11% year-over-year growth. <h2>Amazon's expansive ecosystem</h2> Amazon is steadily broadening its offerings beyond its retail origins to become a provider of many technologies. It's now a platform for all manner of services from logistics to healthcare. This is illustrated in Amazon extending its e-commerce capabilities to an expanding universe of third-party sellers, enabling them to hawk their wares on the site. A recent example is Saks Fifth Avenue, which launched Saks on Amazon in Q1. And that's just the tip of the iceberg. The company built up logistics operations to ship products to customers faster, and now offers its delivery capabilities to other sellers. Consequently, third-party seller services contributed $36.5 billion in Q1 revenue, up from $34.6 billion in 2024. But there's more. Third-party sellers also use Amazon's advertising business to promote their products. This exemplifies how Amazon's offerings can feed off each other. As a result, the company has built up several services into enormous businesses in their own right. For instance, the tech titan is now an advertising juggernaut, generating $13.9 billion in Q1 ad revenue. Amazon is now eyeing satellite-based broadband to reach people in rural areas through its Project Kuiper service. More people with internet access means a greater pool of potential customers. Project Kuiper is scheduled to launch this year. <h2>Amazon's AI ambitions</h2> Perhaps the greatest reason to invest in Amazon is its advances in artificial intelligence (AI). Today, AI systems live in cloud computing environments to supply the immense computer power needed for AI to execute tasks. Amazon's cloud business, Amazon Web Services (AWS), is the global leader in the space. With AWS, Amazon achieved a number of AI advances. Its Alexa digital assistant has evolved into the AI-powered Alexa+ this year, which can remember who in your family is a vegetarian for dinner suggestions or recommend when you should leave for work based on traffic conditions. The company's AI is also behind the army of robot workers in its warehouses, contributing to increasingly faster shipping speeds. This is important according to CEO Andy Jassy, who said: &#34;When we promise faster delivery times, customers complete purchases at a meaningfully higher rate and shop with us more frequently.&#34; AI also literally drives Amazon's new robotaxi service, Zoox. Vehicles in the Zoox fleet have no steering wheels, and are completely controlled by AI. The service will be available in select cities later this year. More AI solutions are coming. Jassy sees the tech as a game-changer, stating: &#34;Generative AI is going to reinvent virtually every customer experience we know, and enable altogether new ones about which we've only fantasized.&#34; Along with these reasons to invest, now isn't a bad time to consider buying shares. Here's a look at Amazon's stock valuation using the price-to-earnings (P/E) ratio. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/d8b4b7956b5d45db0e1c79fe31f0f34a.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="441" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/d8b4b7956b5d45db0e1c79fe31f0f34a.png"/> Data by YCharts. The chart shows that Amazon's P/E multiple is lower than it's been over the past year, up until President Donald Trump's April tariff announcements caused the entire stock market to crater. The company's ability to drive sales through pricing strategies, its vast ecosystem of offerings, and growing AI capabilities position Amazon to not only weather short-term macroeconomics, but to thrive for years to come. </div>

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Amazon's stock has seen a 1% decline this year, contrasting with a 4% rise in the S&P 500, largely due to macroeconomic concerns and tariff policies. However, long-term investors see potential in Amazon's pricing strengths, expansive ecosystem, and advancements in AI. The company leverages its scale for competitive pricing, has broadened its services beyond retail, and leads in cloud computing with AWS. With projected revenue growth and innovative AI applications, Amazon remains a strong investment opportunity.

- Amazon's stock has declined 1% this year, contrasting with a 4% rise in the S&P 500, primarily due to concerns over consumer spending linked to tariff policies.  
- The company maintains strengths in pricing, an expansive ecosystem, and advancements in artificial intelligence, which position it for long-term growth despite current economic challenges.  
- With projected revenue growth and a lower price-to-earnings ratio, Amazon presents a compelling investment opportunity as it adapts to market conditions.

3 Reasons to Buy Amazon Stock Like There's No Tomorrow