Key Support Levels and Future Outlook

Amazon stock has not been holding its ground, having fluctuated between investor unease and growth strategies. After struggling later in August after publishing its second-quarter earnings report, shares of the e-commerce giant have come under renewed selling pressure, yet hold essential technical support, which provides hope of a rebound.

Strong Q2 Earnings Set Amazon, Investors on Cautious Path

Amazon released a strong financial performance that exceeded expectations in late July, i.e., Net income increased to $18.2 billion in the second quarter, or $1.68 per diluted share, compared with $13.5 billion, or $1.26 per diluted share, in the second quarter of 2024. The company also reported revenue of $167.7 billion, which surpassed expectations of $162 billion. This represented a 12% revenue growth y-o-y and a stunning 31% increase in operating income to $19.2 billion.

Key business segments such as AWS and advertising also saw remarkable growth, with AWS revenue increasing by 17.5% and advertising by 22%. Although these numbers were good, they were not good enough to stem off concerns raised by investors because of the guidance for the future and concern that the growth would be difficult to sustain. 

As of August 22, 2025, the shares were trading at around $228.84, after a reduction of almost 5 in the past week. This decrease was against the backdrop of mixed market sentiment that dragged down stocks of major technology companies. 

Technical Support and Market Sentiment

Technically, the Amazon stock prices recovered after touching the 50-day simple moving average (SMA), which is a crucial support level that the stock has not breached in several instances in weeks. This indicates that there is some level of support. A decisive break in the 50-day SMA may indicate testing new lower key support levels of around $215 and $200.

Amazon Courageous Investments

Among the most significant growth strategies of the company is its massive expansion into grocery delivery, which it expects to achieve in 2,300 cities by 2025. More than 1,000 cities currently utilize same-day delivery via Amazon Fresh and Whole Foods, and that number is set to expand by twofold. In July 2020, the company eliminated the membership fee of $9.99 a month to receive grocery delivery as a Prime member and implemented free same-day delivery for orders that exceed $25 to foster increased adoption and competitive advantage.

This broad-based establishment is backed by heavy investments in infrastructure, such as retrofitting warehouses with a refrigerated area, including a $12 million retrofit facility in Jacksonville, Florida. These enhancements will help to corner more of the $1.5 trillion grocery market by providing speedier delivery services that are more convenient to consumers in the smaller cities and in rural populations.

This aggressive growth has not been well-received by investors to date. The analysts also point out that the logistical and service improvements at the company had yet to impact stock performance. The marketplace is awaiting tangible results that will show that these efforts will produce long-term revenue and profit growth that would then inspire the re-rating of Amazon shares higher.

Future Outlook

Amazon is at a crossroads. The firm’s financial performance demonstrates its ability to exhibit robust earnings growth, which AWS, advertising, and retail lines can back. Meanwhile, the stock has been susceptible to the broader market influences and investor fears over its growth prospects.

Amazon may have found its new cash cow and long-term lifeline in the grocery delivery extension, especially as it manages to disrupt and capture meaningful market share away from brick-and-mortar stores based on convenience and low prices.

But, in the short term, the stock has important technical barriers to overcome. The key factor is whether the stocks would hold the 50-day moving average, which the breaking could lead to a rebound of the stocks and the interest of the investors, and falling below this critical limit could lead to the continuation of the fall to the levels of significant support at around $215 and $200.

Market participants will be focused on any new information provided on such earnings growth, visibility on guidance, as well as the evolution of grocery delivery traffic in the forthcoming weeks. The way Amazon maneuvers these obstacles, however, appears destined to determine the course of its stock during the rest of this year.