Amazon’s Bears Have Raised the White Flag—Get Excited

Key Points

• Amazon’s post-earnings selloff was brutal, but it has already lost momentum.
• Analysts remain overwhelmingly bullish, with targets ranging up to $280.
• The $220 mark would set the stage for a fresh push towards highs. 

Shares of tech giant Amazon.com Inc. NASDAQ: AMZN dropped more than 10% in just two sessions to start the month, immediately slipping into a technical correction. The move came after the company’s Q2 earnings report, a set of good results but not quite good enough to justify the 45% rally since April. While headline beats and solid performance across most business lines impressed, weaker-than-expected guidance took some of the shine off.

The pullback came right as the broader market was losing steam; only the opening short-term traders needed to lock in gains. For the bears, it was the long-awaited moment: a chance to finally see the deeper correction, if not the outright downtrend, they’d been predicting.

Yet barely a week later, their momentum already looks spent. The signs suggest they’ve waved the white flag, and it may be time to get bullish on Amazon again.

The Technical Floor Is Holding Firm

Perhaps the most important sign comes from the chart. For the past week, sellers have been unable to push Amazon below its post-earnings low from Monday. That’s not for lack of trying; the stock has been tested multiple times, but each dip has been met with strong buying interest.

This matters because it signals a massive source of demand sitting at what the bulls see as a discount. The initial rebound off those lows was sharp, and while the stock has been consolidating in recent sessions, it has refused to give back those gains. That’s a key point: the panic selling has already dried up, and most of the profit-taking has run its course.

As long as Amazon shares can tread water above $220, they should have the foundation they need for the next leg higher. That level now represents a clear line in the sand for both bulls and bears, and investors should watch it closely. 

Analyst Sentiment Is Still Overwhelmingly Bullish

Any sign of real bearish momentum would likely be reflected in analyst downgrades, and we’re simply not seeing it. The opposite is happening. This month, the Goldman Sachs and Cowen teams have reiterated their Buy ratings, joining the long list of bullish calls that have followed the stock for months.

This steady stream of bullish coverage is exactly the backdrop that can turn a post-earnings dip into a launchpad.

There are also fresh price targets to consider, with some reaching up to $280, which indicates an upside of nearly 30% from current levels. If Amazon can regain its pre-earnings momentum, this would send the stock into blue-sky territory, and it feels quite feasible.

With the company consistently outperforming in its key business units, from AWS to advertising, and the broader stock market experiencing some of its best weeks of the year, the potential here is real. 

The “Bad News” Is Already Priced In

If we accept that the weaker-than-expected guidance in July’s report was the main culprit for the drop, it now looks like the market has fully digested it. The reality is that Amazon’s business lines are firing on nearly all cylinders, and macro conditions remain supportive for big tech.

When you strip away the noise, this sell-off has the hallmarks of healthy profit-taking after a big run. Guidance-driven dips tend to fade quickly when the underlying fundamentals are strong, and it feels like that’s what’s playing out here.

Consider that broader market sentiment is still very much in risk-on mode, which means that, short of something breaking, high-quality names like Amazon don’t, and even can’t, stay down for long.

Bulls Back in Control

If the stock can maintain its hold above $220, the next logical target is $235, where it was trading right before the report came out. From there, attention will shift to February’s all-time high around the $240 mark, and beyond that to $280, which multiple analysts are targeting.

Unless the bears can quickly come up with a fresh catalyst, it’s hard to see them regaining control. Amazon has spent most of the past four months showing investors its ability to rally seemingly in one direction for weeks on end, and it could be about to do the same again.