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Key Points
- Amazon shares have climbed as much as 12% since mid-February, even as the S&P 500 has fallen as much as 5%.
- There are several reasons to think this could be the start of a shift in sentiment, including recent analyst updates that call for as much as 35% of potential upside.
- Backing up this argument are Amazon’s technical indicators, which point to improving momentum as the stock rebounds from oversold conditions.
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Amazon.com (NASDAQ: AMZN), along with many of its tech peers, spent much of last year battling investor anxiety over the scale of its artificial intelligence (AI) spending plans. Those fears intensified following last month’s earnings report when management outlined a capital expenditure forecast of roughly $200 billion for 2026.
Given that figure represented a staggering 50% increase from the prior year, investors were understandably rattled about the cost of building massive AI infrastructure and how it could impact margins.
The reaction was swift, and the stock sold off to its lowest level since last May in the days following the report. However, just a few weeks later, the narrative appears to be shifting. Shares are currently trading just above $210, having bounced from support around $200, with that move counting for even more, given the broader market has moved in the opposite direction.
Over the same period, the S&P 500 has fallen roughly 5% amid rising geopolitical tensions and a surge in oil prices, weighing on risk sentiment. Amazon’s sudden ability to climb higher while the broader market sells off suggests investors may finally be looking past the AI spending fears, and the evidence goes beyond price action alone.
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Amazon Is Gaining Even When the Market Is Falling
One of the most telling signals that sentiment may be changing is the stock’s recent price behavior. After trending down from November through the middle of February, Amazon suddenly found strong support around $200. The bears were unable to take it any lower, and buyers have been stepping in aggressively ever since, helping to push the stock up as much as 12%.
That move would be notable on its own, but it becomes even more significant when viewed in the context of the broader market environment. As mentioned above, amid geopolitical tensions and soaring oil prices, the S&P 500 has dropped nearly 5% over the same period.
Stocks that rally while the broader market is falling are rare, and it speaks to the renewed interest in Amazon’s prospects. Having failed to impress for much of 2025 and started 2026 on the wrong foot, it looks like the market may finally be past any AI-spend concerns.
Analysts Remain Strongly Bullish
Another sign that investors may be warming to Amazon again is the fresh support from Wall Street analysts. Despite concerns about AI spending, analysts have, in recent weeks, not only reiterating Buy ratings but also boosting their price targets.
Wolfe Research is among the latest firms to do just this. Earlier this week, the team there reiterated its Buy rating while raising its price target to $255, implying roughly 20% upside. This echoed Evercore's move, which went even further at the end of February with a reiterated Buy rating and a fresh $285 price target, implying potential upside of around 35%. Overall, Amazon carries a Moderate Buy consensus rating on MarketBeat.
Price targets should never be treated as guarantees, but the consistency of these bullish calls is worth noting. When multiple analysts maintain strong stances like this following a selloff, it suggests strong underlying confidence in the company’s ability to keep growing.
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Technical Indicators Are Turning Constructive
Beyond the improving price action and continued analyst support, Amazon’s technical setup is also beginning to look more constructive. Momentum indicators that previously reflected a deepening downtrend are now reversing, such as the stock’s moving average convergence divergence (MACD), which recently produced a bullish crossover, as well as its relative strength index (RSI).
This latter one, in particular, is noteworthy. When a stock’s RSI rebounds from deeply oversold conditions, like those Amazon’s RSI was in last month, it can often signal that bearish momentum is fading and that buyers are regaining control.
Importantly, these technical signals are occurring alongside improving price action, following a strong bounce off support. That’s a potent combination that, when taken together, increases the reliability of each signal by itself. And while none of these indicators guarantee a sustained rally from here, they do all help drive up the probability of a larger recovery move taking shape.
Looking ahead to the rest of the month, if Amazon can continue consolidating above the $200 level, that should form a solid base for a broader recovery rally. While investors were justified in previously focusing on the risks of the company’s AI spending strategy, they’re also justified in starting to look beyond those risks to the enormous long-term opportunity of that investment.
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