Amazon (NASDAQ: AMZN) stock has seen a 16% decline over the past month, weighed down by macroeconomic uncertainties and disappointing Q1 2025 guidance.
The stock came under pressure following its Q4 and full-year 2024 earnings report, despite beating Wall Street expectations on both earnings per share (EPS) and revenue.
While the company reported a 10% year-over-year revenue increase, investors reacted negatively after Amazon projected Q1 2025 revenue between $151 billion and $155.5 billion, missing the $158.5 billion consensus estimate.
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At the lower end, this would mark Amazon’s slowest quarterly growth rate since going public in 1997, raising concerns over a potential slowdown.
This weaker outlook sent AMZN stock into a downward spiral, with shares declining to $194 at the press time, marking a 0.52% loss in the latest trading session.
Why Amazon’s long-term growth remains intact
Despite near-term headwinds, analysts remain bullish on Amazon’s long-term growth prospects, with e-commerce, cloud computing, and digital advertising continuing to drive expansion.
Amazon continues to dominate the U.S. e-commerce market, accounting for 39.6% of total online retail sales, with projections suggesting it will surpass 40.9% by 2025.
Meanwhile, Amazon Web Services (AWS) remains a powerful revenue driver, posting 19% growth in Q4 2024, up from 13% a year earlier. However, AWS is losing ground to competitors, with Azure growing 31% and Google Cloud expanding 30% in the same period.
Despite this, Amazon is well-positioned to capitalize on the booming cloud computing industry, which is expected to reach $2 trillion by 2030, according to Goldman Sachs Research.
Another critical growth engine is Amazon’s rapidly expanding advertising business. The company’s online ad segment generated $17.29 billion in revenue in Q4 2024, with an 18% year-over-year increase.
Amazon’s online advertising unit has grown considerably over the years and is now the third-largest platform in the global digital advertising market, trailing Alphabet (NASDAQ: GOOGL) and Meta Platforms (NASDAQ: META).
Technical analysis hints at a potential buying opportunity
Alongside strong fundamentals, technical indicators suggest a potential bullish setup for Amazon stock. Noted market analyst TradingShot has identified a key technical pattern, setting an end-of-year price target of $300.
According to the analysis, Amazon’s stock recently broke below its 50-week moving average (1W MA50) for the first time since August 2024. The stock has been trading in a two-year upward channel, and current price action suggests it is nearing a higher low.
The last higher low occurred in August 2024, when Amazon briefly dipped below the 1W MA50 before staging a strong recovery. That marked a “Max Pain” scenario, which has been a pattern in each weekly bottom over the past two years.
Over the past two years, every time Amazon has hit these levels, the stock has rallied around 65.24% in the following months.
If this historical trend continues, the technical projection suggests AMZN could reach $300 by the end of 2025.
While short-term uncertainties and slower AWS growth have weighed on sentiment, Amazon’s long-term fundamentals remain strong. If historical trends hold, this pullback could be a prime buying opportunity, with technical indicators pointing to a significant upside potential.
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