On 30 July, Amazon.com released its financial results for the second quarter of 2026, beating market expectations by a wide margin. Revenue climbed 20% year-on-year to $200.6 billion, well above the consensus estimate of approximately $196.5 billion.

The AWS cloud division was the primary growth engine, with sales jumping 37% — its fastest expansion rate in 18 quarters. The segment's operating profit surged to $16.6 billion. The acceleration underscores intensifying demand for cloud infrastructure as enterprises scale generative AI workloads, with AWS competing against Microsoft Azure and Google Cloud Platform for a growing share of AI-driven compute spending. Overall operating profit rose 43% to $27.5 billion. Net income reached $62.6 billion, or $5.75 per share, though a significant share of that figure stemmed from a $53.4 billion non-operating gain tied to the revaluation of Amazon's equity stake in Anthropic, in which Amazon has invested up to $8 billion. The gain reflects Anthropic's increased valuation and highlights the broader financial impact of Amazon's AI investment strategy alongside AWS's operational growth. Advertising revenue also grew 26% year-on-year, continuing its trajectory as a high-margin pillar that now ranks Amazon as the third-largest digital advertising platform globally behind Google and Meta.

Amazon Technical Analysis

On the four-hour AMZN chart, a downtrend took hold after the stock peaked near $278 in May. The slide toward $226 at the end of June gave way to a corrective rebound along an ascending trendline defined by higher lows. This pattern persisted until mid-July, when the price neared resistance around $258 — the current red resistance level.

A break below that trendline indicated the correction had exhausted its momentum. The price subsequently reverted to the prevailing market profile range, trading between the POC zone at $244.5 and the lower profile boundary at $232.5. Below this region sits the green support level at $226.5.

If the current bounce sustains and the price pushes above the POC zone, two additional hurdles await: the upper profile boundary at $249 and the red resistance level at $258. Meanwhile, the RSI + MAs indicator currently registers readings of 46, 36, and 43. The slower moving average has not yet crossed below the parity zone, while the RSI has already moved out of oversold conditions.

Summary

Robust earnings provide a fundamental catalyst that could support the ongoing rebound, although the RSI + MAs oscillator has not yet produced a definitive signal. In the near term, further management guidance on AI infrastructure capital expenditure, combined with broader market reactions to earnings from other major technology companies, may shape the stock's next directional move.

Source: FXOpen Blog