Amazon Stock Surges. Why It's a Mag 7 Outperformer on Tariffs Deal

Dow Jones05-12

Amazon.com was leading the Magnificent Seven group of stocks early on Monday as markets welcomed a U.S.-China truce on tariffs. While the deal is good news for all the megacap technology companies, it has particular resonance for the e-commerce company.

Amazon was up 7.3% in early trading. That outstripped gains for fellow Mag 7 members, Apple, Microsoft, Nvidia, Alphabet, Meta Platforms and Tesla.

The Roundhill Magnificent Seven exchange-traded fund, which gives equal weight to the stocks, was up 5.1%.

One aspect of Amazon's benefit from the deal is obvious -- many of the sellers on its e-commerce marketplace source their goods from China and the reduction in tariffs will mean they can continue to do business.

However, there are additional benefits. About 30% of Amazon's first-party merchandise is sourced from China and Chinese advertisers spent around $8 billion on Amazon advertising in 2024, according to Raymond James estimates.

The deal should also reduce concerns about a reduction in spending on artificial-intelligence technology, which is a boon for Amazon's cloud-computing business, as well as those of its rivals Microsoft and Alphabet's Google.

Barron's has previously written that Amazon could be the best positioned of all the Magnificent Seven stocks after a fall early this year.

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