Amazon’s Stock Volatility: A Buying Opportunity Amid Market Uncertainty

Amazon’s stock (NASDAQ: AMZN) has faced significant volatility in recent weeks, retreating 17% from its early February highs. Despite strong earnings and a dominant position in cloud computing and AI, investor sentiment has been shaken by broader market weakness, AI-related costs, and trade concerns. However, with AMZN finding support at $200, long-term investors may see an attractive buying opportunity.

Amazon’s Recent Decline: What’s Driving the Sell-Off?

The stock’s pullback intensified after the launch of DeepSeek, which rattled AI and semiconductor stocks. Although Amazon initially remained resilient, former President Donald Trump’s trade tariff announcements on Canada and Mexico added to the uncertainty, causing another downward move. Even after the White House later delayed and reduced the tariffs, AMZN continued its decline, falling below its 100-day Simple Moving Average (SMA).

AI Expansion and Capital Expenditures Weigh on Sentiment

Amazon has tripled in value over the past two years, rising from $80 at the end of 2022 to a peak of $242 in February 2025. This surge was driven by impressive growth in its cloud computing division, Amazon Web Services (AWS), which reported a 19% revenue increase, surpassing $100 billion in net revenue during Q4 2024.

However, the company’s AI-driven expansion strategy comes at a cost. Amazon is allocating a record $100 billion in capital expenditures for 2025, primarily for AI infrastructure and AWS growth. While this long-term investment strengthens Amazon’s competitive position in cloud AI, some investors remain cautious about its short-term impact on profit margins, contributing to recent stock weakness.

Technical Rebound: Signs of a Potential Recovery?

Despite the sell-off, Amazon’s price action on Friday indicated a potential reversal. The stock dipped to $192.54 but rebounded sharply to close the week at $200. This movement formed a doji candlestick pattern, often considered a bullish reversal signal, while the 100-day SMA held firm as a support level.

Market Outlook: Is Amazon Stock a Buy at $200?

Amazon’s long-term fundamentals remain strong, but near-term challenges, including broader stock market weakness and concerns over AI spending, continue to weigh on investor sentiment. The S&P 500 and Nasdaq have both dropped over 5% from their recent highs, increasing selling pressure on major tech stocks.

If Amazon holds above the 100-day SMA and maintains its rebound, it could present a compelling buying opportunity for long-term investors. However, a break below the $200 level could signal further downside risk in the short term. Traders and investors should watch upcoming market trends and earnings updates closely to assess Amazon’s next move.

Final Thoughts

While Amazon’s recent pullback has raised concerns, its core business remains strong, and its long-term AI-driven strategy positions it well for future growth. Market downturns often create opportunities for investors willing to endure short-term volatility. By focusing on Amazon’s fundamentals and technical indicators, long-term investors can assess whether now is the right time to add this tech titan to their portfolios.