After months of frustration, Amazon.com Inc (NASDAQ: AMZN) is finally showing signs of life. Shares of the tech giant are currently trading around $240, up from $200 in the last week of March, marking a 20% rally in just a few weeks and the stock’s best run in months. That move has taken Amazon back to levels not seen since early February and, for the first time in a while, has started to shift sentiment in a meaningful way.
As recently highlighted by MarketBeat, for much of the past 18 months, Amazon has been stuck in neutral, weighed down by concerns around heavy capital expenditure, uncertain returns on its AI investments, and a lack of clear momentum in its core business. That backdrop is what makes the recent move so notable. The question now is whether this is the start of something more sustained, or just another short-lived rally in a stock that has struggled to hold gains. Let’s take a closer look.
A Shift in Sentiment Seems to Be Taking Hold
To set the scene, this recent rally hasn’t exactly come out of nowhere. Instead, several factors have been quietly aligning in Amazon’s favor, helping to rebuild investor confidence. One of the most important has been the growing acceptance that Amazon’s heavy investment in AI infrastructure may begin to pay off sooner than previously expected.
What had been viewed primarily as a drag is increasingly being seen as a necessary step to secure long-term growth, particularly within its AWS business.
This is in part due to Amazon’s latest shareholder letter, where CEO Andy Jassy revealed that AWS is already generating over $15 billion in annualized AI revenue, offering the clearest sign yet that its massive spending is beginning to pay off.
At the same time, reports of a potential Globalstar deal have added a new layer of strategic interest. While still speculative, the idea that Amazon could accelerate its satellite and connectivity ambitions has helped reinforce the view that the company is thinking beyond its current business lines and positioning itself for the next phase of technological infrastructure.
Taken together, these developments have helped shift the narrative from one focused on near-term cost and uncertainty to one centered on longer-term opportunity and expansion.
Analysts Are Backing Recent Momentum
What makes this story even more compelling is that it’s backed by ongoing analyst support. Recent updates from April alone include Wells Fargo and Citizens JMP reiterating Buy or equivalent ratings on the stock, signaling continued confidence in Amazon’s growth potential.
Their price targets are also worth pointing out, with Wells Fargo’s reaching as high as $315. Given where the stock is trading right now, there could still be around 30% upside ahead, even after the recent rally. For a stock that had previously struggled to maintain any upward momentum, that kind of analyst conviction for even further gains counts for a lot.
Technically, the picture is improving as well. While the stock’s relative strength index is starting to creep towards overbought territory, that is often a sign of strength in the early stages of a breakout rather than a reason for immediate concern. Amazon’s upward momentum, once established, could last longer than that of many of its peers.
This combination of improving fundamentals, supportive analyst commentary, and strengthening price action is what gives the current rally so much credibility.
Some Risks Still Remain
That said, the setup is not without risk. A 20% move in just a few weeks naturally raises expectations, and with earnings due towards the end of next week, the bar is quickly being reset higher. Investors will be looking for confirmation that the improving narrative is backed by tangible progress, particularly in areas such as AWS growth and returns on AI-related spending.
There is also the question of sustainability. Amazon has seen rallies before over the past year, only for them to die out as bullish conviction faded. Until the company can consistently deliver against its long-term strategy, there remains a risk that sentiment could shift just as quickly as it has improved.
In addition, this potential acquisition of Globalstar, though exciting, adds an element of uncertainty. Large, strategic moves can take time to play out, and considering Amazon’s stock actually dropped on the news, the market may be skeptical of any further steps in that direction.
For now, however, the balance appears to be shifting in Amazon’s favor. The stock has broken out of its recent range, sentiment is improving, and analyst support remains strong. At the same time, with earnings expected next week, this is not a risk-free entry point. The stock is no longer as deeply discounted as it was last month, and the recent rally means there’s a higher bar for success.
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The article "Amazon Stock Surges 20%: Can the Rally Survive Earnings?" first appeared on MarketBeat.
