Amazon.com Inc’s (NASDAQ:AMZN) shares have been under pressure due to tariffs, declining growth in its core verticals, and increased competition.
With a growth of just above 2%, the Seattle-based company’s stock has persistently underperformed the Nasdaq 100 Index’s 11%+ growth in 2025.
- Amazon’s stock is under pressure. Check its live prices here.
For those seeking exposure to Amazon’s trajectory of growth while also mitigating some of the risks associated with market fluctuations, ETFs offer a more balanced solution.
Consumer Discretionary ETFs
Amazon accounts for a substantial portion of consumer-oriented funds. For example, the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) and the Vanguard Consumer Discretionary Index Fund (NYSE:VCR) both have Amazon as a leading holding. Both ETFs offer exposure not just to Amazon but also to other discretionary titans, including Home Depot Inc (NYSE:HD) and McDonald’s Corp (NYSE:MCD), diversifying risk across several retail titans.
The Fidelity MSCI Consumer Discretionary Index ETF (NYSE:FDIS) is also one that closely tracks the sector, providing diversified exposure while minimizing reliance on the ups and downs of a single stock.
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Targeted Retail Plays
For those seeking more intense retail exposure, the VanEck Retail ETF (NASDAQ:RTH) is a more focused play, with Amazon being a leading constituent.
The same goes for the First Trust Dow Jones Internet Index Fund (NYSE:FDN), which offers more of a digital commerce and internet tilt, with Amazon as part of it alongside other heavyweights such as Meta Platforms Inc (NASDAQ:META), Alphabet Inc (NASDAQ:GOOGL), and Netflix Inc (NASDAQ:NFLX).
These thematic and sectoral ETFs enable investors to retain Amazon in their portfolios while minimizing the effect of short-term pressures unique to the company.
Bottom Line
Amazon can still be the jewel in the crown of e-commerce and cloud computing, but its underperformance serves to highlight the dangers of being too heavily invested in a single stock.
A recent bout of selloffs, prompted by weaker-than-expected expansion of Amazon’s cloud operation, fueled concerns that it was losing market share to competition, Bloomberg noted in a report. For investors already concerned that the company’s expensive bets on AI have not paid off in the same way as its peers such as Microsoft Corp (NASDAQ:MSFT) and Meta, it provided another layer of concern.
ETFs, be they broad consumer discretionary funds or more targeted retail plays, provide investors with a means of riding Amazon’s gains while insulating themselves from its pains.
For investors who believe in Amazon’s long-term narrative but need an easier ride, ETFs may be the more “Prime” choice.
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