Will this earnings cycle propel $AMZN stock past $250?

It’s been a wild ride for Amazon investors this year. From a shaky start that saw the stock tumble nearly 25%, to a confident rebound powered by AI buzz, Prime Day strength, and a surprise legislative tailwind - $AMZN is now back in the spotlight. With earnings set to drop after the bell, the question on everyone’s mind is whether this quarter will be the catalyst that finally pushes Amazon past that elusive $250 mark.

Wall Street’s feeling bullish. Analysts are hiking price targets, AWS is gaining fresh momentum, and a cool £12 billion in extra free cash flow is about to land in Amazon’s lap thanks to the recently passed “One Big Beautiful Bill.” But with macro headwinds still swirling and whispers of a cooling cloud market, the stakes are higher than ever.

So, is Amazon gearing up for another leg higher - or is the market getting ahead of itself? Let’s break it down.

Analyst buzz: Wall Street’s big call

If analyst sentiment were a game show buzzer, it’d be lighting up non-stop for Amazon. Every major bank with skin in the game is leaning bullish. Morgan Stanley is holding steady at a $300 target, calling Amazon the biggest winner from the “One Big Beautiful Bill.” 

UBS has nudged theirs to $271, BMO to $270, and Wedbush has just crossed the magic threshold with a target of $250 flat. 

Not one of the 26 analysts tracked by Visible Alpha has dared to hit “Sell.” The average target? A hair above $250. That’s not just optimism, according to analysts; that’s consensus conviction.

The big boost: £12 billion in Amazon's free cash flow

What’s fuelling all this excitement? Free cash flow - and loads of it. Thanks to the new legislation “One Big Beautiful Bill”, Amazon could pocket an extra $15 billion a year from 2025 to 2027, followed by $11 billion in 2028. In Sterling, we’re talking about a tidy £12 billion boost per annum. That’s capital with teeth. 

Morgan Stanley reckons much of this cash will be pumped straight into Amazon Web Services (AWS), Amazon’s cloud giant. Think AI acceleration, warehouse automation, and possibly a more dominant edge in the cloud wars. The bank suggests even reinvesting just half of it could lead to billions in savings through next-gen automation.

AWS: The silent powerhouse

While Microsoft and Nvidia steal most of the AI spotlight, Amazon’s AWS is quietly becoming the engine room of the AI economy. AWS growth has picked up speed again, with analysts predicting stronger performance in the second half of the year.

And here’s where things get really interesting: BMO Capital believes “agentic capabilities” - a fancy way of saying intelligent AI decision-making - are still flying under the radar. They’ve even raised their AWS estimates, arguing these underappreciated tools could dramatically improve efficiency across Amazon’s cloud infrastructure.

Amazon Prime Day Performance

Retail’s not sitting in the back seat either. Amazon’s longest-ever Prime Day just wrapped - a four-day shopping marathon that broke records. Early signs suggest that gross merchandise value (GMV) during that period grew in the mid-teens compared to last year, with same-day delivery coverage expanding 17% year-on-year.

Even tariffs didn’t shake the cart. Prices held firm, shoppers kept spending, and Amazon came out looking stronger than ever on the consumer front.

From slump to swagger: A stock rebound story

As of mid-April, $AMZN was down 24% year-to-date. Fast-forward to today, and it’s sitting nearly 6% higher for the year. That’s a serious turnaround, and it didn’t happen by accident.

Behind the scenes, eight analysts have revised earnings per share estimates upward in the past month alone. The Street is now expecting Q2 revenue of $162.19 billion, with EPS climbing to $1.33 - up from $1.26 a year ago.

And if Amazon delivers, it won’t just meet expectations - it could rewrite the next chapter of the stock’s rally.

Risks still lurking

Now, before getting carried away. There are still clouds on the horizon (pun intended).

• Tariffs and geopolitical tensions remain a wild card - Amazon even closed its Shanghai AI lab recently, hinting at growing U.S.-China friction.
  
• Project Kuiper, Amazon’s satellite internet play, is expensive and still years away from profit.
  
• And then there’s the ever-present macro uncertainty, from inflation to foreign exchange headwinds.
  

But here’s the rub: even with these risks, analysts believe Amazon’s risk/reward balance still skews positively - especially if AWS keeps firing.

Technical outlook: Could it break $250?

With the earnings call just hours away, all eyes are on Amazon. If it posts a solid beat and signals confidence in AWS and AI-driven efficiencies, that $250 ceiling could finally shatter - and fast. But if guidance is soft, or if cloud growth cools, we could be in for a temporary stall.

Either way, Amazon’s comeback story is well underway - and this earnings cycle may just be the plot twist that propels it into its next big chapter.

At the time of writing, the stock is dipping on the daily chart with volume bars indicating an even tug-of-war between bulls and bears. If the past three days are anything to go by, we’ve seen dominant buy pressure - hinting at a potential price reversal and a move north. If an uptick materialises, we could see the stock’s price rise towards $235.00 and beyond. 

On the other hand, if we see a further dip, prices could find support floors at the $226.00 and $219.75 support levels. A further collapse could see prices find support at the $207.35 price level. 

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