Amazon Stock: On the Verge of a Breakout With Fed Cuts and Trade Hopes Rising

• 27 October 2025
• |
• 22:13

Amazon (NASDAQ: AMZN) has entered a critical phase of consolidation as investors weigh its next big move.

The stock has been trading sideways for months, forming a clear horizontal channel between support near $210 and resistance around $245. Recent price action shows Amazon bouncing twice from the lower boundary, confirming that buyers remain active in defending this level.

At the close of the latest trading session, Amazon shares stood at $226.73, gaining 1.12% on the day. The technical setup suggests that the market is gathering energy for a potential breakout, with the direction likely to depend on macroeconomic signals and the company’s upcoming earnings results.

Technical Picture: Neutral But Leaning Bullish

On the daily chart, AMZN has respected its range-bound structure since early summer, with buyers stepping in near $210 and sellers capping rallies around $245. The RSI currently sits at 56, signaling balanced momentum but with room to rise before entering overbought territory. Meanwhile, the MACD lines are gradually converging toward a bullish crossover, hinting at a possible acceleration in upward momentum.

Technically, the picture remains constructive as long as the $210 level holds. A breakout above $245 could open the door to a new uptrend targeting the $260–$270 range, while a close below support might expose the stock to short-term weakness toward $190. For now, the chart reflects accumulation rather than distribution, often a prelude to renewed strength.

Macroeconomic Context: Rate Cut and Trade Hopes

Beyond the chart, optimism over a potential Federal Reserve rate cut later this year is supporting tech sentiment. Lower borrowing costs could boost consumer spending and advertising demand—two key pillars of Amazon’s business model.

At the same time, improving rhetoric around U.S.–China trade relations has also eased some investor caution. Any progress toward a trade resolution could benefit Amazon’s supply chain and help reduce input costs, further enhancing margins as the holiday shopping season approaches.

Restructuring Drive: Trimming to Streamline

While the macro backdrop turns more supportive, Amazon continues fine-tuning its internal structure. The company reportedly plans to eliminate around 30,000 corporate positions, roughly 10% of its white-collar workforce, as part of an efficiency drive that began in 2022. The cuts will span multiple divisions, including devices, human resources, and operations.

Although the move raised eyebrows, analysts largely view it as a proactive step to optimize operations after years of pandemic-era overhiring. Amazon’s total headcount still exceeds 1.5 million employees worldwide, underscoring its vast scale and operational complexity. Cost savings from this restructuring could be redirected toward growth areas such as logistics automation and AI infrastructure.

Earnings in Focus: Can Amazon Impress Again?

Amazon is set to report its third-quarter 2025 results on October 30, and expectations are high. Analysts project earnings of $1.57 per share, up nearly 10% year over year, on revenue of roughly $177.9 billion—an increase of about 12%.

Wall Street also anticipates broad-based growth across Amazon’s segments:

• Online stores revenue forecast: +8.3% YoY to $66.5 billion
• Third-party seller services: +10.6% YoY to $41.8 billion
• Advertising services: +20.5% YoY to $17.3 billion
• AWS (Amazon Web Services): +17.8% YoY to $32.3 billion

These forecasts suggest that despite macro pressures and growing competition, Amazon’s core business remains robust. Notably, its advertising arm continues to emerge as a high-margin growth engine, while AWS remains pivotal to the company’s overall profitability.

Cloud Competition and Infrastructure Strain

Amazon Web Services, the company’s largest profit contributor, faces both opportunity and challenge. UBS analysts recently noted a renewed optimism in cloud infrastructure spending, with several enterprise clients signaling budget recoveries in Q3. However, AWS still trails behind Microsoft Azure in growth acceleration, reflecting tighter competition in the AI-driven cloud race.

A recent AWS outage that disrupted major platforms like Autodesk, Snapchat, and Zoom reignited debate about global dependence on a few cloud providers. Despite this, AWS’s scale and reliability continue to underpin Amazon’s dominance in digital infrastructure. The upcoming earnings report will show whether AWS has regained momentum after the brief stumble.

Expanding “Amazon Now” in the UAE

Beyond its North American operations, Amazon continues to push boundaries globally. The company recently launched “Amazon Now”, a 15-minute delivery service in the United Arab Emirates, enabling customers to receive groceries, electronics, and personal care products nearly instantly. Orders are fulfilled via micro-warehouses embedded within urban neighborhoods—a strategy designed to strengthen its grip on ultrafast commerce.

This expansion highlights Amazon’s ability to innovate even as it streamlines other business segments. It also reinforces the company’s edge in last-mile delivery—one of its most important competitive advantages.

Valuation and Market Performance

Despite its scale and innovation, Amazon’s 2025 performance has lagged behind its tech peers. The stock is up just 3.9% year-to-date, compared with gains of 25.8% for Microsoft and 40.3% for Alphabet. Analysts attribute this slower performance to moderate AWS growth and cautious investor sentiment ahead of earnings.

Still, Wall Street remains broadly optimistic. The consensus rating for AMZN remains “Strong Buy”, and the average 12-month price target sits above $260, suggesting significant upside potential if earnings meet expectations.

Outlook: A Quiet Build-Up Before the Move

For now, Amazon’s chart paints a picture of calm before a potential storm. The double bounce from support reflects underlying buying interest, while the broader market environment—rate-cut optimism, trade stability, and solid retail demand—could all act as fuel for a breakout.

If Amazon delivers strong results on October 30 and signals continued resilience in AWS and advertising, the prolonged sideways trend may finally give way to renewed upward momentum. For patient investors, the current consolidation phase could represent a base forming for the next leg higher.