Amazon Stock Price Levels to Watch After Earnings Tumble

Amazon shares fell 8% after quarterly results failed to impress investors, breaking below the lower trendline of a rising wedge pattern. Key support levels to watch include $199, $190, and $175, while a major overhead area near $233 should also be monitored.

Amazon (AMZN) shares tumbled by more than 8% after the company's quarterly results failed to impress investors, breaking below the lower trendline of a rising wedge pattern. The stock fell to $199, breaching key support levels at $190 and $175, and the major overhead area near $233 remains a significant concern for investors.

Amazon's Q2 earnings report, released on July 31, 2025, showed mixed results. Revenue and earnings per share (EPS) exceeded market expectations, with revenue reaching $167.7 billion and EPS at $1.68, surpassing estimates of $162.09 billion and $1.33, respectively [1]. However, the company's Q3 operating income guidance of $15.5 billion to $20.5 billion fell short of analysts' expectations of $19.48 billion [1].

The primary driver of the stock slump was Amazon Web Services (AWS), which saw revenue climb 18% year over year to $30.87 billion. While this growth was in line with analysts' expectations, it did not accelerate from the previous quarter. Meanwhile, AWS's rivals, Microsoft (MSFT) Azure and Alphabet's (GOOGL) Google Cloud Platform, delivered breakout performances [1].

Amazon's CFO, Brian Olsavsky, stated that the company spent $31.4 billion in capital expenditures in the second quarter and expects to maintain this level of investment through 2025. He noted that AWS continues to be the primary driver of these investments to support demand for AI services [1].

Analysts remain divided on the impact of Amazon's capital expenditures. JPMorgan analysts raised their price target to $265 from $255, implying a 23% upside, and said they would "buy the pullback" [1]. UBS analysts maintained a price target of $271 and argued that investors should not worry about growing capex, stating that selling the stock would require believing in irrational economic decisions [1]. Citi raised its price target to $270, highlighting continued demand strength for AWS [1].

Despite the mixed earnings report and the stock's decline, Wall Street remains optimistic about Amazon's prospects. The average price target of $258.03 suggests a 20.15% potential upside, while GuruFocus predicts a slight downside for the stock, estimating a GF Value of $204.45, indicating a potential downside of 4.8% from the current stock price [2].

Amazon shares are currently consolidating near key resistance at $226.26, with MACD showing weak but stabilizing momentum. The price is above the 9-day EMA ($222.19), signaling recovery, but sustained volume is required for a bullish breakout. A failure at resistance may result in a short-term pullback [3].

Key support levels to watch include $199, $190, and $175, while a major overhead area near $233 should also be monitored. Investors should closely follow Amazon's earnings and guidance for future quarters, as well as its capital expenditures and investments in AI services.

References:
[1] https://www.investopedia.com/amazon-stock-is-falling-analysts-say-to-buy-the-dip-11783226
[2] https://www.ainvest.com/news/amazon-q2-earnings-beat-falls-short-cautious-guidance-analysts-maintain-optimism-2508/
[3] https://seekingalpha.com/news/4476590-8-out-of-11-consumer-cyclical-stocks-deliver-eps-wins-this-week-earnings-scorecard