Amazon.com Inc. (AMZN) shares pushed higher Tuesday afternoon, and the reason might have less to do with what Amazon is doing and more to do with what a potential rival has decided not to do.
Why Amazon Is Getting a Boost
The move appears tied to reports that Nvidia Corp (NVDA) is pulling back from its cloud ambitions. According to The Information, Nvidia CEO Jensen Huang has restructured the company's cloud division and is backing away from earlier plans to build a service that would compete head-to-head with major cloud providers like Amazon Web Services.
Here's the backdrop: Nvidia launched DGX Cloud back in 2023 as an AI-focused cloud platform. It looked like a potential challenge to the big cloud players. But Nvidia has since changed course, scaling back external efforts and instead folding the product more tightly into internal engineering work designed to support AI development on Nvidia hardware.
For Amazon, that's basically good news. AWS already dominates the cloud market with deep enterprise relationships and a massive ecosystem that creates serious barriers for anyone trying to break in. Nvidia deciding to stick to its core strengths rather than chase broad cloud market share removes one more headache for AWS. That shift appears to be lifting Amazon shares on Tuesday.
What the Charts Are Saying
The technical picture for Amazon is a bit muddled right now. The stock is trading above its short-term moving averages, which suggests some near-term momentum, but the 20-day simple moving average sits below the 50-day, hinting at possible weakness ahead.
Momentum indicators aren't offering much clarity either. The RSI is sitting at 49.50, right in the middle of the road—neither overbought nor oversold. That means traders are likely watching for a decisive move in one direction or the other. The MACD remains below its signal line, pointing to fading momentum and potentially more downside pressure if buyers don't step in.
Key levels to watch: support at $215 and resistance at $239. A bounce off support could mean the current trend continues, while breaking through resistance might signal a stronger rally is brewing.
Worth noting: the golden cross that formed in July, when the 50-day SMA crossed above the 200-day SMA, still suggests a longer-term bullish trend. But the current positioning relative to those moving averages means traders should stay alert for any signs of weakness.
Price Action
Amazon shares were up 1.33% at $231.46 at the time of publication Tuesday.