Amazon logo with shipping boxes and logistics icons in the digital world.
Amazon shares have risen as much as 12% since mid-February, even as the S&P 500 has fallen by as much as 5%.
There are many reasons to think this could be the start of a turnaround in sentiment, including a recent analyst update calling for a potential upside of 35%.
Supporting this argument are Amazon’s technical indicators, which point to improving momentum as the stock recovers from oversold conditions.
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Amazon.com (NASDAQ: AMZN )along with many of its tech peers, has spent much of the past year grappling with investor concerns about the scale of its artificial intelligence (AI) spending plans. Those fears were fueled after last month’s earnings report, when management forecast capital expenditures of about $200 billion for 2026.
Given that number represents a staggering 50% increase over last year, investors were keen to understand the cost of building a large AI infrastructure and how it could impact margins.
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The reaction was swift, and stocks sold off to their lowest levels since last May in the days following the report. However, just a few weeks later, the narrative seems to be changing. Shares are currently trading just above $210, breaking from support around $200, with this move counting for even more, provided the broader market moves in the opposite direction.
Meanwhile, the S&P 500 fell nearly 5% amid geopolitical tensions and a rise in oil prices, weighing on risk sentiment. Amazon’s sudden ability to rise while the broader market is selling off suggests that investors are finally getting over their fears of AI spending, and the evidence goes beyond price action alone.
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One of the most obvious signs that sentiment may be changing is recent stock price behavior. After being low from November to mid-February, Amazon suddenly found strong support around $200. Bears haven’t been able to make it lower, and buyers have been stepping in aggressively since then, helping to push the stock up 12%.
This move would be significant on its own, but it becomes even more significant when viewed in the context of the broader market environment. As noted above, amid geopolitical tensions and rising oil prices, the S&P 500 has fallen nearly 5% over the same period.
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Stocks that rally when the broader market declines are rare, and that speaks to the renewed interest in Amazon’s prospects. Having failed to make an impact for much of 2025 and started 2026 on the wrong foot, it looks like the market may finally be moving past AI spending concerns.
Another sign that investors may be warming to Amazon again is the renewed support from Wall Street analysts. Despite concerns about AI spending, analysts in recent weeks have not only reiterated buy ratings but also boosted their price targets.
Wolf Research is one of the latest companies to do just that. Earlier this week, Tim reiterated a buy rating there while raising his price target to $255, which would imply a nearly 20% upside. This echoed the move by Evercore, which went further with a reiterated buy rating at the end of February and a new price target of $285, indicating a potential upside of around 35%. Overall, Amazon has an average buy agreement rating on MarketBeat.
Price targets should never be used as a guarantee, but the persistence of these highs is worth noting. When many analysts maintain a bullish stance like this after the sale, it suggests strong fundamental confidence in the company’s ability to sustain growth.
Beyond the improving price action and continued analyst support, Amazon’s technical setup also looks very constructive. Momentum indicators that previously reflected a deep downtrend are now reversing, such as the stock’s Moving Average Divergence (MACD), which recently produced a bullish crossover, as well as its Relative Strength Index (RSI).
This last one, in particular, is noteworthy. When a stock’s RSI pulls back from deeply oversold conditions, as Amazon’s RSI did last month, it can often signal that bearish momentum is fading and buyers are regaining control.
Importantly, these technical signals occur alongside improving price action, following strong bearish support. This is a powerful combination that, when taken together, alone increases the credibility of each signal. And while none of these indicators guarantee a sustained rally from here, they all help shape the potential for a major recovery movement.
Looking ahead to the rest of the month, if Amazon can continue to strengthen above the $200 level, it should form a strong base for a broader recovery rally. While investors have already been justified in focusing on the risks of the company’s AI spending strategy, they are also justified in starting to look beyond those risks to the huge long-term opportunity of this investment.
The article “Amazon Grows While Market Falls—Here’s Why” was originally published by Marketbeat.
