Amazon Stock Momentum Strong Despite Near-Overbought Signals, Targeting $245 in Near Future

Technical Analysis

Amazon (AMZN) closed at $234.11 on July 31, 2025, up 1.70%, with intraday movement between $231.40 and $236.53. The RSI at 68 signals the stock is nearing overbought territory but has not yet peaked, supporting continued upward momentum in the short term. The 50-day ($217.39) and 200-day ($209.44) moving averages remain well below the current price, demonstrating a sustained bullish trend. The MACD is positive at 4.72, reinforcing a strong upward technical bias. Volume surged to 95.98 million, more than double the average daily volume (41.73 million), reflecting heightened trading interest.

Key support levels stand at $224.94 (stop-loss) and $223.30, currently well below the market price, providing downside cushioning. No immediate resistance is identified up to the 52-week high of $242.52, with consensus price targets at $245–$250 indicating limited short-term supply barriers.

For the next trading day, the setup favors modest gains, potentially testing the $236–$238 range given momentum and volume strength. Over the coming week, price appreciation toward the $245 target appears feasible barring externally driven shocks.

Fundamental Analysis

Amazon’s trailing twelve months (TTM) EPS is $6.13, yielding a price-to-earnings (P/E) ratio of 38.19, elevated relative to historical averages but justifiable by robust growth prospects, especially in cloud computing and AI integration. The discounted cash flow (DCF) intrinsic value estimate at $29.52 appears anomalous and likely erroneous relative to market data, thus not reliable for valuation in this context.

The company’s market capitalization stands at a substantial $2.49 trillion, underscoring dominant market positioning. Despite a recent $184 billion market value drop following cautious guidance—particularly concerns over AWS cloud unit underperformance amid intensifying competition from Microsoft and Google—Amazon continues to report strong profit growth (+35%) driven by investment in artificial intelligence and expanding retail operations.

The stock’s forward outlook remains mixed: top-line growth and AI-powered efficiencies support long-term value creation, but near-term risk stems from macro factors including rising tariffs and cloud segment margin pressure. The next earnings release on October 30, 2025, will be critical to reassess growth sustainability.

Intrinsic Value and Long-Term Investment Potential

Amazon’s long-term intrinsic value is tied to its leadership in e-commerce and cloud services, both sectors poised for secular growth. Expansion into AI and related technologies is a positive catalyst. While the current P/E is elevated, it reflects market expectations of persistent revenue and earnings acceleration.

Investors focusing on intrinsic value should monitor AWS unit performance and margin recovery. Macro risks like tariffs present cyclic headwinds but do not fundamentally alter Amazon’s growth trajectory. The stock’s upward trend and dominant market cap underpin solid long-term investment potential, albeit accompanied by intermittent volatility.

Overall Evaluation

Categorizing Amazon as a Buy candidate aligns with strong technical positioning, solid earnings growth, and strategic investment in AI. The stock’s momentum, volume spikes, and analyst consensus (83 buys, 8 holds, 1 sell) reinforce bullish sentiment despite caution over near-term cloud profitability and external tariff risks.

The lack of defined resistance and a target consensus near $245 suggests upside potential into the near future, balanced against proximity to overbought RSI and the need for close monitoring of upcoming earnings and sector dynamics.

In conclusion, the analysis supports continued accumulation for investors seeking growth exposure in technology and e-commerce with conviction in the company's capacity to innovate and scale over time.