Amazon Shares Slide 7% After AWS Growth Disappoints
Amazon shares dropped 7% after its cloud computing division reported growth figures that fell short of investor expectations.
FUNDAMENTAL OVERVIEW:
Amazon.com shares fell nearly 7% on Friday after the company’s latest results raised concerns among investors that its cloud business is losing ground to Microsoft and Alphabet in the race to dominate artificial intelligence.
Amazon Web Services (AWS), the long-time leader in cloud computing, posted a 17.5% year-over-year revenue increase for the June quarter, narrowly beating Wall Street forecasts. However, this growth significantly lagged behind Microsoft Azure’s 39% surge and Google Cloud’s 32% rise.
Despite investing $31.4 billion in capital expenditures—more than its competitors—and projecting full-year spending to exceed $118 billion, AWS’s performance failed to impress investors. In contrast, Microsoft and Google were rewarded for their aggressive investments, which showed clearer signs that AI is already fueling meaningful growth across their businesses.
Amazon’s latest earnings report suggests the company is handling tariffs and changing trade policies more effectively than Wall Street had anticipated.
Online store sales exceeded analyst expectations, rising 11% year over year, while revenue from seller services also came in above forecasts. Additionally, the total number of items sold across Amazon’s online and physical stores increased by 12%, a sign that consumer demand remains strong despite ongoing tariff pressures and economic uncertainty, according to a Friday note from analysts at Citizens.
AMAZON TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Amazon is trading within an up channel.
Amazon is moving below 20&50 Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying Zone, while the Stochastic oscillator suggests a Neutral trend.
Immediate Resistance level: 223.10
Immediate support level: 207.60
HOW TO TRADE AMAZON
After a strong upward move, Amazon encountered resistance near a previous supply zone, leading to a sharp price reversal. The stock is now trading near a key support level, showing signs of weakness. If this support zone is tested and holds, and Amazon remains above it, a potential rebound could follow, paving the way for a renewed move to the upside.