We just published a list of the 10 Best Dow Stocks to Buy for 2027 and Amazon (NASDAQ: AMZN ) ranked 7th on this list.
Yahoo Finance reported on November 5 that the Dow Jones Industrial Average tumbled 3.4%, or more than 1,800 points, while the S&P 500 fell 4.4% and the Nasdaq Composite sank 5.5% into correction territory. Chip stocks took the brunt of the damage, with AI chip designers and memory makers among the hardest hit. The slide erased the gains from a day earlier, when the Dow had jumped 3% for its best session of 2026 after Democrats won control of both chambers of Congress, Yahoo Finance wrote on November 4. By mid-session Thursday, the index was heading for its worst second day after a midterm election in data going back to 1896, the outlet noted.
The Dow's Safe-Haven Run Cracks
For most of the week, the Dow had looked like the sheltered corner of the market. Yahoo Finance reported on November 2 that the Dow edged up 0.4% while the Nasdaq dropped roughly 1% as investors rotated out of technology names and into consumer cyclical and financial services shares, which left the Dow looking like the market's relative winner. On Thursday, that cushion gave way, as the focus turned to what a Democratic Congress could mean for the AI buildout, and for the data centers driving it in particular. You might also be interested in reading our piece on how the AI chip leader's growth compares with the cloud software giant's .
The reversal was fast and violent. Shay Boloor, chief market strategist at an equity research firm, pointed out that the VIX volatility index posted its biggest one-day jump in more than two years. It took the Nasdaq just six minutes on Thursday to erase its entire post-election rally, and even Wednesday's winners such as the iPhone maker turned lower. That Wednesday buying had been helped by falling oil prices, while the Windows maker jumped 6% to a record high.
A Jobs Report Steadies the Tape
Friday brought a partial rebound. Yahoo Finance reported on November 6 that the US added 165,000 jobs in October, and the Nasdaq gained 1.9% while the S&P 500 rose 1% and the Dow added 0.1%. For a closer look at one of the biggest AI spenders caught in the sell-off, we recently covered why the search giant's low price-to-earnings ratio can mislead . The stronger jobs data lifted Treasury yields and kept Federal Reserve policy at the center of market attention, Reuters reported on November 6, as the price-weighted index of 30 major US companies held roughly flat.
Amazon made the list with an average upside potential of 25%, based on analysts' average price target. It has short interest of 0.95% and had 369 hedge fund holders in Q2 2026.
Amazon Web Services is accelerating at a scale few businesses have ever reached. AWS revenue grew 39% in the third quarter, its fastest pace in nearly five years, and Chief Executive Andy Jassy said growth should top 40% in both 2027 and 2028. Behind that confidence sits an AWS backlog of $578 billion, which is growing at a triple-digit rate.
Analysts focused on what that growth does for profits. On October 29, UBS analyst Stephen Ju wrote that he expects AWS operating margins of 46% in 2027, well above what the Street expects. KeyBanc Capital Markets' Justin Patterson said AWS is well positioned to capture AI demand, from companies modernizing how they work to new consumer assistants. The quarter also produced Amazon's highest operating margin ever, which suggests the heavy investment has not diluted profitability.
Amazon's own chips add to the case, because customer commitments for its Trainium and Graviton processors rose many times over from a year earlier. Bedrock, the service that lets companies build on AI models, is the fastest-growing multibillion-dollar business in AWS history, Jassy said. Management says that demand is already signed, which is why it keeps spending on capacity.
Here is our analysis on Amazon (NASDAQ:AMZN): Amazon (AMZN) Trades at 24 Times Forward Earnings. Can Its Cash Engines Fund the Robotaxi Bet?
While we acknowledge the risk and potential of AMZN as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than AMZN that operates as a critical AI tollbooth and stands as the most important company in the world, check out our report about this must-own AI stock .
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