As the chart shows, Amazon (AMZN) shares have displayed pronounced bearish momentum following the release of a weak earnings report on 5 February:

→ Revenue: $213.4 bn (forecast: $211.4 bn)
→ Earnings per share (EPS): actual $1.95, forecast $1.97

According to media reports, particular concern arose after Amazon announced plans to spend $200 bn on capital expenditure in 2026, mainly on AI, data centres, and chips. This represents an increase of roughly 60% from last year and significantly exceeds analysts’ expectations of around $146 bn.

Market participants may fear that the AI arms race (against Microsoft and Google) will be extremely costly, monetisation of these technologies could take years, and success is not guaranteed. As a result, we see two wide bearish gaps under the $232 and $220 levels, formed after the earnings release.

Technical Analysis of Amazon (AMZN)

Since June last year, the thickened trendline acted as a key support, regarded by the market as an attractive level to buy AMZN shares. That line has now been decisively broken.

Using this trendline as the median and the historical peak as the upper boundary to construct a channel, we can observe that the line dividing the channel into the lower two quarters (QL) currently serves as support.

The gap areas may act as resistance, and prevailing negative sentiment is likely to continue weighing on AMZN shares. In this scenario, bears could break not only the QL line but also the psychological $200 level, heightening concerns.

Under this bearish scenario, the share price could fall towards the lower boundary of the channel, near $188.

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