Amazon Stock: Trade Deals Dismiss Weak Q2 Outlook, Fuel Rebound Above $200
Technical and fundamental signals are in line for a long-term uptrend continuation as AMZN shares rebound significantly from their April...
Quick overview
- AMZN shares have sharply recovered from April lows, rebounding nearly 20% after a steep correction of over 35% from February to early April.
- The stock's recent bullish breakout above key moving averages indicates a potential long-term uptrend continuation.
- Despite strong Q1 earnings, cautious guidance for Q2 has tempered investor enthusiasm, impacting stock performance.
- Renewed optimism surrounding U.S.–China trade negotiations has improved market sentiment, contributing to AMZN's price recovery.
Technical and fundamental signals are in line for a long-term uptrend continuation as AMZN shares rebound significantly from their April lows.
February–April Correction Shakes AMZN
Amazon (AMZN) stock endured a steep correction between February and early April, shedding more than 35% of its value during that period. This sharp drop was triggered by a combination of elevated valuations, rising interest rate expectations, and investor caution around global trade policies. The stock briefly touched a low near $161 in early April, reaching levels not seen since late 2023.
AMZN Chart Weekly – Rebounding off the 100 SMA and Bullish Breakout
Following that low, AMZN staged an aggressive rebound. Prices surged nearly 20%, with the rally gaining momentum into May. On the weekly chart, the 50-period simple moving average (SMA) at around $190 initially acted as resistance, capping upside attempts. However, last week’s strong bullish candle closed above this key level, indicating that bulls are reclaiming control.
This week began with a significant gap up in AMZN stock, pushing it above all major weekly moving averages. Technically, this reinforces a reversal narrative and places Amazon back on the radar for momentum traders.
Strong Earnings Overshadowed by Cautious Guidance
Amazon’s Q1 2025 earnings report delivered impressive results. Revenue came in at $155.7 billion, topping expectations of $154.9 billion. Earnings per share (EPS) stood at $1.59, also beating forecasts. Despite the strong financials, investor enthusiasm was tempered by softer-than-expected guidance for Q2.
Amazon projected Q2 operating income between $13 billion and $17.5 billion, below analysts’ median forecast of $17.8 billion. Similarly, revenue guidance of $159–$164 billion slightly missed the $161.6 billion consensus estimate. This cautious outlook initially pressured the stock early last week.
Trade Talks Lift Sentiment
Over the weekend, renewed optimism surrounding U.S.–China trade negotiations further improved risk appetite across global markets. President Trump’s positive remarks and Beijing’s constructive tone offered hope that new agreements could ease tariffs and benefit companies heavily involved in international logistics and e-commerce—such as Amazon.
This news bolstered market sentiment across equities and digital assets alike, helping Amazon’s stock price jump back above $200. The bounce suggests that macroeconomic factors could continue supporting the stock despite tempered company forecasts.
Outlook: Momentum Remains Strong
The recent price action, combined with improving global trade sentiment and a resilient earnings report, suggests that Amazon may resume its long-term uptrend—especially if broader indices continue rallying. A confirmed breakout above $205 could open the door for a move toward the previous highs around $220–$230 in the coming weeks.
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