Amazon (AMZN) Shares Retreat from All-Time High After Earnings Report
As shown in the Amazon (AMZN) stock chart, the price reached an all-time high of around $242 per share on 4 February. However, following the earnings report on 6 December, AMZN shares declined despite the company exceeding analysts' expectations:
Earnings per share: Actual = $1.86, Forecast = $1.48
Revenue: Actual = $187.8bn, Forecast = $187.3bn
Investor disappointment may have stemmed from:
Signs of slowing cloud business growth. Amazon, a pioneer in public cloud services with Amazon Web Services (AWS), now reports annual cloud revenue growth of around 20%, down from over 50% five years ago.
Soaring capital expenditure on AI data centres with uncertain profitability prospects. Amazon has projected approximately $105bn in capital spending for 2025, up 27% from 2024 and 57% from 2023.
Technical Analysis of Amazon (AMZN) Stock
AMZN remains within an upward trend, indicated by the blue channel on the chart. However, bullish momentum appears vulnerable as:
The price struggles to reach the upper boundary of the channel.
A bearish "head and shoulders" (SHS) pattern is visible on the chart.
A bearish gap (marked with an arrow) has formed post-earnings, suggesting a potential resistance area ahead.
This points to a possible pullback. If it occurs, AMZN stock could correct, potentially towards the parallel orange line, drawn based on the blue channels width. A test of the $217 support level is also possible.
Should You Buy AMZN Shares Now?
Following the earnings report, AMZN has underperformed the S&P 500 (US SPX 500 mini on FXOpen). However, analysts remain optimistic. According to TipRanks:
45 out of 46 analysts recommend buying AMZN stock.
The average 12-month price target for AMZN is $267.
Read more: https://fxopen.com/blog/en/oa-amazon-amzn-shares-retreat-from-all-time-high-after-earnings-report/
Text source: Forex Trading Blog
