Amazon Stock Breaks Trend as AWS Growth Accelerates

Amazon's stock price has broken through a short-term descending trendline and is currently trading around $266.43, after recovering from the 38.2% Fibonacci retracement level at $263.95.

The company's growth in Amazon Web Services (AWS) accelerated to 37% in Q2, reaching $42.2 billion in revenue, with a backlog of approximately $496 billion and management indicating that demand still outpaces capacity.

Amazon is also investing heavily in AI infrastructure, planning to spend around $220 billion this year, primarily on data centers, servers, networking, AI chips, and power infrastructure.

The investment is expected to stimulate cloud growth and alleviate pressure on free cash flow, but there are concerns that the company's capital spending plan may not be sustainable if demand for AWS weakens or yields on U.S. Treasuries remain high.