Is It Time to Buy Amazon Stock (AMZN), or Will the Downtrend Continue?

The Amazon stock has been on a steep decline but it has found support around $190 which suggests the end of pullback, or is there room for more?

Amazon Stock Struggles After February Peak

Amazon (AMZN) stock has been on a sharp decline since early February, when it reached a high of $242.50. Since then, the price has reversed, dropping over $50 and falling below $190. However, buyers have consistently stepped in at this level, turning it into a key support zone. The 50-day simple moving average (SMA) (yellow) has also provided additional support, helping to stabilize the price.

Recent Decline and Cloud Business Impact

Last week, Amazon shares fell another 2% after the company announced price cuts on its cloud server infrastructure powered by AI-focused Trainium CPUs. This move raised concerns about potential margin pressures in its cloud business. Despite the decline, AMZN found support once again at $190, with the broader stock market recovering following the Federal Reserve’s interest rate decision on Wednesday. The Dow Jones Industrial Average (DJIA), which includes Amazon, climbed over 1% this week, while the NASDAQ posted a modest 0.4% gain.

Technical Indicators: Bullish Reversal or More Downside?

Amazon stock has now formed two consecutive doji candlesticks, a potential sign of a bullish reversal after the recent selloff. However, market sentiment remains cautious, especially with concerns about upcoming tariffs that could impact the broader stock market.

Despite recent losses, Amazon’s stock has tripled in value over the past two years, rising from $80 at the end of 2022 to its February 2025 peak of $242.50. The company’s strong Q4 earnings further support a positive outlook, with operating income surging 86% year-over-year to $68.6 billion.

AWS Growth vs. Price Cuts

Amazon Web Services (AWS) has been a major driver of the company’s revenue, increasing net revenue by 19% to surpass $100 billion. However, recent price reductions in AWS’s AI computing services, powered by Amazon’s Trainium chips, have sparked concerns over profitability. Investors are debating whether these cost cuts will lead to stronger long-term adoption or further weigh on margins.

Key Levels to Watch

For now, Amazon’s stock remains at a critical level, with support at $190 holding firm. A break below this level could lead to further downside, with $188 being the first target, which is the 2021 high. On the other hand, a rebound from this point might signal the end of the recent correction. Investors will be watching closely to see if the broader market recovery can lift AMZN shares back toward previous highs, but they will likely remain on the sidelines until April 2 tariffs are applied, or if we get more clarification from the White House before that.

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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