Amazon cloud revenue jumps significantly: Can AMZN continue gains?

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Amazon jumps 3.96% to $259.96 today

Highlights

Amazon reported AWS revenue up 37% with operating income at $16.6 billion, benefiting from robust enterprise and developer demand.
A $220 billion AI infrastructure investment is straining cash flow due to power limits and high Nvidia server costs but solidifies long-term innovation focus.
Shares of Amazon closed at $259.96, trading above key moving averages, with technical indicators favoring a 77% probability of a move to $245.82 to $266.31.

Cloud gains lift sentiment as AI investments strain cash flow

Amazon's latest AWS results showed a 37% increase in revenue with operating income reaching $16.6 billion, according to Yahoo Finance. This strong performance in its cloud business underscores persistent enterprise and developer demand, providing a fundamental boost to the company's earnings outlook and supporting buying interest in the stock. Meanwhile, Amazon's $220 billion investment in AI infrastructure—currently straining cash flow due to power limitations and expensive Nvidia server procurement, as noted by Businessinsider—signals its long-term commitment to innovation even as it navigates near-term operational headwinds.

Divergence in bullish price and bearish momentum signals

On the hourly chart, AMZN trades above the MA-20 at $252.71, MA-50 at $256.58, and the longer-term MA-200 at $242.71. The Ichimoku Kijun sits at $254.54 and serves as immediate support. Momentum indicators including MACD and ADX point to ongoing selling pressure, while RSI, CCI, and Bull/Bear Power readings suggest an oversold environment with sellers still in control. Stochastic RSI is neutral, and the Awesome Oscillator remains aligned with the present downside bias, highlighting the divergence between upward price action and underlying momentum signals.

Sideways trend anticipated as breakout odds remain low

Over the next two to three days, AMZN is expected to consolidate within a range of $245.82 to $266.31, which represents a typical volatility band relative to current levels. There is a 23% probability of continued upward movement, while a 77% likelihood favors a near-term pullback. The base scenario anticipates sideways trading unless a breakout above resistance or a decisive move below immediate support triggers a new directional trend.

Viktoras Karapetjanc, expert at Traders Union, highlights Amazon's clear earnings strength from robust AWS growth. He believes ongoing investment in AI infrastructure, despite pressuring cash flow, reflects Amazon's commitment to long-term innovation. The analyst notes that technical momentum has yet to fully confirm the price advance but sees fundamental and sentiment tailwinds supporting the current move. 'As long as Amazon sustains this cloud-powered growth and demonstrates resilience through its AI strategy, I expect buyers to remain engaged.'

Previously it was reported that Amazon intensified its push into AI hardware with new developer tools designed to rival Nvidia's software ecosystem and strengthen AWS's competitive positioning. The current technical setup suggests that while Amazon's strategic AI investments reinforce its long-term fundamentals, near-term traders should monitor $254.54 as a key pivot level for signs of a directional breakout or further consolidation.

Source of Data: AMZN Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.