Will Amazon (AMZN) Stage Continuation Of A "Bull Run"?

The 8% gain experienced by Amazon (AMZN) on 12 May 2025, is a significant one-day jump, and as an investor of $Amazon.com(AMZN)$ stock, I have been seeing how Amazon have been trying to push higher but not able to do so.

So in this article, I would like to explore whether this one-day jump could signals the continuation of a "bull run" for Amazon.

There are several factors we need to consider for. Let us deduce them one by one.

Reasons for the May 12th Gain

Market-Cap Gains: Amazon, along with Apple, significantly contributed to the "Magnificent Seven's" over $830 billion increase in market capitalization on that day. This suggests broad positive sentiment towards major tech companies.

Partnership with FedEx: Amazon announced a new partnership with FedEx for delivering large packages. This news likely boosted investor confidence in Amazon's logistics and delivery capabilities.  

U.S.-China Trade Thaw: Reports indicated a 90-day suspension of some U.S.-China tariffs, which could ease supply chain worries for Amazon and benefit its e-commerce platform.  

Technical Factors: The stock price rose above its 50-day and 200-day moving averages, which are often seen as bullish technical signals. Trading volume also exceeded the daily average, indicating strong buying interest.

Factors Supporting a Potential Continued Bull Run

Here are several possible factors that could support potential continued bull run for Amazon.com

Strong Analyst Ratings: A significant majority of analysts covering Amazon have a "Strong Buy" or "Buy" rating on the stock, indicating positive long-term expectations.  

High Growth Potential: Despite its size, Amazon has multiple growth drivers, including Amazon Web Services (AWS), its advertising business, and its continued expansion in e-commerce and other sectors.  

With multiple growth drivers which could drive its expansions, we are seeing a good high growth potential in both EPS and revenue.

AI Investments: Amazon is heavily investing in Artificial Intelligence (AI) to enhance its cloud services (AWS) and its retail operations, which is expected to drive future growth and efficiencies.  

Cost-Cutting Measures: Amazon's efforts to streamline operations and improve profitability are showing positive results.  

E-commerce Leadership: Amazon remains the leading online retailer with significant scale and a strong customer base.  

AWS Growth: Amazon Web Services continues to be a major growth engine and a highly profitable segment for the company. Analysts expect a reacceleration of growth in AWS.

Fair Value Discount: Some analyses suggest that the stock is trading below its estimated fair value, indicating potential for price appreciation.

Factors that Could Hinder a Continued Bull Run

But we need to understand that especially after the recent Amazon earnings, there are some factors which could be headwinds for Amazon, so a continued bull run might be hindered.

Size and Growth Rate: As one of the largest companies globally, maintaining historically high growth rates becomes challenging.

Though Amazon have potential to grow its revenue with multiple growth drivers, we can see that from 2022 to 2024, Amazon have kind of struggled to maintain a high revenue growth, this might be made even harder if there are more headwinds that Amazon could faced.

Competition: Amazon faces increasing competition in e-commerce, cloud computing, and AI from other major tech players and discount retailers.

Economic Uncertainty: Inflation and potential economic slowdowns could impact consumer spending and thus affect Amazon's retail business.

Regulatory Concerns: Large technology firms, including Amazon, face increasing regulatory scrutiny.  

Historical Volatility: Amazon's stock has shown significant volatility in the past.  

Valuation: While some analysts see it as undervalued, others might view its price-to-earnings ratio as relatively high compared to the broader market.

Analyst Price Targets and Forecasts

The average price target for Amazon is around $241.46, representing a potential upside from the current price.

Some analysts have significantly higher price targets, suggesting substantial growth potential.

Long-term forecasts for Amazon's stock price in the coming years vary, with some predicting a steady climb.

Technical Analysis - EMA - 1-day Period

Amazon have been one of the biggest recipients of the gains after the China trade deal, we saw Amazon quickly gain back the level.

Amazon was slightly muted right now but it was no longer above the 200 EMA though it is above the daily higher low which is anything above 184. We can see that there is a higher low big gap waiting to be filled, so what could actually moved AMZN back to the 184 level could be negative news. This could happen to other stocks as well.

But if AMZN could break through resistance, then we might be seeing the next large take-profit zone between 217 and 227. So this might be an opportunity to do a swing trade for quick profit.

Technical Analysis - EMA - Weekly Period

For the weekly, Amazon is looking very good with legs for expansion and any consolidation on the daily which could be extended by a loss of the higher higher low pattern.

So we can look at the higher low level above 166 on any pullback, for the weekly trade, we can write some short puts under the market price now. But I have nothing to worry as I am going long-term on AMZN, and even at 205, Amazon is pretty fairly priced in terms of the ir future expansions, with multiple growth drivers.

Summary

The 8% gain on May 12th reflects positive market sentiment driven by specific news and broader tech optimism. There are certainly strong arguments to be made for a continued bull run for Amazon, supported by its growth drivers, analyst ratings, and investments in key areas like AI.

As investors, I think we should also be mindful of the potential headwinds related to its size, competition, economic conditions, and regulatory landscape. A single day's gain, while significant, does not guarantee a sustained upward trend.

Appreciate if you could share your thoughts in the comment section whether you think AMZN can be hold for long-term with its fairly priced share.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.