Amazon Stock Shows Potential Upside Amid Technical Resistance Ahead of Earnings Report

Technical Analysis

Amazon’s stock closed at $188.99 on April 25, 2025, up 1.31% with intraday trading between $185.50 and $189.94. The RSI at 61 indicates mild bullish momentum without entering overbought territory. The price remains below the 50-day ($196.55) and 200-day ($199.22) moving averages, signaling a medium-term bearish trend. The MACD is negative (-8.36), reinforcing downward pressure in the last three months. The ATR of $4.82 reflects moderate volatility. Immediate resistance is at $191.10, with support near $178.41 and stop-loss calculated at approximately $182.79. Volume on April 25 was 36.41 million, below the 49.50 million average, indicating somewhat subdued trading interest.

For April 28, 2025, the technical outlook suggests potential modest gains if the stock breaks resistance at $191.10, though it faces headwinds given moving average resistances. Over the next week, the stock may oscillate between support ($178.41) and resistance ($191.10), awaiting the May 1 earnings announcement for a decisive directional cue.

Fundamental Analysis

Amazon’s market capitalization stands at $2.01 trillion, reflective of its dominant market position. The trailing twelve months EPS is $5.54, resulting in a P/E ratio of 34.11, indicating premium valuation compared to broader market averages but justified by growth prospects. The discounted cash flow valuation at ~$29 suggests substantial intrinsic undervaluation relative to the current market price below $190, implying over 50% upside potential, supported by consensus target prices which average $245.73 with a high target of $285.

Recent news recognizes Amazon’s leadership in e-commerce and cloud computing—sectors projected to grow annually at 16% or more. AWS growth and ad services continue to offset tariff-related pressures. While tariff issues and a slowing trade environment have weighed on the stock, the company’s strong operational execution and AI-related investment tailwinds underpin solid long-term growth. Revenue impacts estimated at $10 billion (North America and International combined) highlight macro risks but are partly priced in given the stock’s 22% drawdown from highs.

Intrinsic Value and Long-Term Potential

The discounted cash flow model and analyst consensus strongly point to undervaluation at current levels. The P/E ratio, though elevated, aligns with Amazon’s established growth trajectory and market leadership. It continues to invest in high-margin cloud and AI technologies, which have significant long-term revenue and margin expansion potential. The historical compound growth has rewarded patient shareholders, and Amazon's innovation pipeline and global reach underpin sustainable competitive advantages. Potential tariff-related risks create near-term volatility but are unlikely to impair Amazon’s intrinsic value over the long term.

Forward-Looking Performance

Given the upcoming May 1 earnings announcement, the immediate trading period may see heightened volatility. The stock is poised for a technical test of resistance near $191; failure to break through could mean consolidation or retracement to support levels near $178. Fundamentally, strong earnings relative to expectations could catalyze a reversal toward the $240+ target range over the next week and beyond. The premium valuation multiples suggest the market anticipates continued earnings growth, and recent analyst buy consensus (81 buys vs. 6 holds, 1 sell) supports this outlook.

Overall Evaluation

Amazon exhibits robust long-term growth fundamentals with clear undervaluation relative to intrinsic value and target prices. Near-term technicals are neutral to slightly bearish but reactive to the forthcoming earnings report. The stock’s premium multiple is justified by leadership in cloud, e-commerce, and AI sectors, which are expected to grow strongly. Macroeconomic and tariff risks pose short-term challenges but do not substantially diminish long-term potential.

Categorized as a “Buy” candidate, Amazon’s valuation gap, growth prospects, and market position outweigh near-term technical resistance and macro uncertainties. The stock offers significant upside potential for investors with a multi-quarter horizon, particularly contingent on earnings outcomes and pipeline sustainability.