Our Stock of the Week is Amazon.com, Inc. (AMZN). A top-performing stock over the past 25 years, AMZN is the world’s largest e-commerce retailer and, through AWS, one of the two dominant cloud infrastructure providers, with a fast-growing advertising business to boot. AMZN remains a go-to name, and given the fact that we’re in the early stages of what is the seasonally weakest time of the year, increased near-term volatility could create some solid trading opportunities in a fundamentally strong, liquid name.
For some context, AMZN has become a major player in the AI space, using its AWS infrastructure as a way to rent out the computing power that AI companies need to train and run their models. The company, meanwhile, has spent years building its own AI chip, Trainium, as an alternative to Nvidia’s GPUs, which is now on its third generation and largely sold out.
Notably, Anthropic has committed to spend more than $100 billion on AWS over the next decade running its Claude models on Trainium specifically, and OpenAI has separately signed on for AWS capacity as well. Amazon raised its 2026 capex guidance to roughly $220 billion, the most of any of the big tech companies, with nearly all of it going into AI data centers, power, and chips. Although that’s pressured free cash flow in the near-term, AWS’s AI revenue run rate has already topped $15 billion in Q1, with another $496 billion contracted backlog.
From a technical perspective, AMZN remains in a long-term uptrend following a 50% drawdown in 2022. Shares briefly dipped below its 200-day moving average in late July before jumping to record highs over the course of two sessions after the company reported Q2 earnings of $5.75 per share (vs. est. $1.82) on revenue of $200.6 billion (vs. est. $196.6 billion)…although the bulk of that EPS beat came from a $53.4 billion non-cash gain tied to Amazon’s Anthropic stake, putting core EPS closer to $1.19. AWS grew 37% to $42.2 billion (its fastest growth rate in over four years) and the company raised 2026 capex guidance to $220 billion from $200 billion. Since then, AMZN has spent the past few weeks digesting gains by pulling back to the 50-day moving average and could be offering a decent entry in this area.
As always, we’d avoid chasing any early strength on Monday morning, and would look trade this name incrementally as the chart develops.
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This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell at any time for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in AMZN at the time this was published. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.
