Amazon stock consolidates at $211 as cloud revenue surges 15%
The company's Amazon Web Services (AWS) segment remains a major profit driver
Amazon.com Inc. (NASDAQ: AMZN) is currently trading at $211.16, experiencing a minor decline of 0.1% over the past 24 hours.
Despite this marginal drop, the stock has shown resilience, maintaining its position above crucial technical levels.
Amazon's ability to sustain its position above the 50-day moving average is a positive technical indicator, suggesting the potential for continued upward momentum. However, the stock is also exhibiting a rising wedge pattern, a formation that typically signals caution, as it can precede a bearish reversal. The Relative Strength Index (RSI) has entered bullish territory, reflecting increased buying interest, but the potential for a short-term pullback remains if the stock is unable to decisively break through the $216 resistance.
In addition to the 50-day moving average, Amazon’s 200-day moving average is positioned at $205, serving as a strong support level. The convergence of the 50-day and 200-day moving averages in a bullish crossover pattern in early May further supports the positive outlook for the stock. Volume trends also provide insights into investor sentiment; the recent surge was accompanied by higher-than-average trading volumes, a sign of strong buying interest. However, a decline in volume without a clear breakout above $216 could indicate a weakening rally.
AMZN stock price dynamics (March 2025 - May 2025). Source: TradingView.
A closer look at the Moving Average Convergence Divergence (MACD) indicator shows a bullish crossover, with the MACD line moving above the signal line. This crossover, which occurred shortly before the recent price rally, is a strong indicator of upward momentum. The MACD histogram is also in positive territory, further confirming the bullish outlook. However, the gap between the MACD line and the signal line is beginning to narrow, suggesting that bullish momentum may be slowing.
Tariff relief fuels optimism despite cautious outlook
Amazon's recent price surge can be attributed to positive news surrounding U.S.-China trade relations. The US and China have agreed on a 90-day reciprocal tariff reduction, which directly benefits Amazon. As a major e-commerce player, Amazon sources approximately 30 percent of its first-party merchandise from China. Additionally, the company's advertising revenue, which saw approximately $8 billion in contributions from Chinese advertisers in 2024, is expected to benefit from improved trade conditions.
The easing of tariffs is expected to reduce cost pressures on Amazon's retail operations and potentially bolster its advertising business, both of which are critical to the company's overall revenue model. However, despite these positive developments, Amazon's leadership remains cautious. CEO Andy Jassy has highlighted ongoing economic uncertainties that could impact consumer spending and advertising budgets.
Amazon's diversified business model offers some insulation from these risks. The company's Amazon Web Services (AWS) segment remains a major profit driver, while its logistics and cloud computing businesses continue to support overall financial performance. AWS, in particular, has shown strong resilience, contributing significantly to the company’s operating income. However, the global economic environment, including inflation concerns and potential regulatory pressures, could still present headwinds.
Breakout or consolidation likely ahead
In the short term, Amazon's stock faces a critical test at the $216 resistance level. A decisive breakout above this mark would confirm the bullish trend and likely trigger further buying interest. In this scenario, the stock could quickly advance to the next resistance at $230. Beyond this, the 52-week high of $242.52 is a plausible target if the bullish momentum is sustained.
Conversely, if Amazon fails to surpass the $216 level, it may enter a consolidation phase or experience a short-term correction. Key support levels to watch in this case are $199 and $170. A pullback to these levels could offer buying opportunities for long-term investors, particularly if the company’s core businesses remain strong.
Amazon’s advertising business generated $56 billion last year, while its $156 billion logistics operation supports third-party sellers. These diversified revenue streams enhance Amazon's resilience, even amid challenges in its core retail segment.
