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This Week's Exclusive Content 2 Ways to Trade Amazon Ahead of EarningsAuthor: Sam Quirke. Posted: 1/20/2026. 
At a Glance - Amazon heads into earnings well below its November high, though with an intact uptrend.
- Bulls see a catch-up trade taking shape after a flat 2025, while the bears want proof that growth has not quietly peaked.
- With analyst support also very strong, it's hard not to want to buy into Amazon's potential—the only question is when.
Shares of tech giant Amazon.com Inc. (NASDAQ: AMZN) were trading just above $230 the week of Jan. 20 as the company prepares for its first earnings report of the year, due in early February. Technically the stock remains in an uptrend — supported by a series of higher lows — but it has begun to look uncomfortably flat. Amazon has struggled for weeks to push past the record high it set in November, leaving the stock in limbo while the broader market marches to fresh highs. That uncommon divergence makes this upcoming report more important than usual. On the positive side, Amazon has several tailwinds working in its favor. On the negative side, it finished 2025 essentially flat and has yet to hit the ground running in 2026. With geopolitical tensions rattling markets, this earnings report feels less like a routine update and more like a chance for Amazon to shake off its slumber and reassert the longer-term uptrend. Here's a closer look at the setup and how investors might approach it. Framing the Setup Looking at the chart, the picture is straightforward. After retreating from the early-November high, Amazon needs to re-ignite momentum quickly; otherwise the stock is likely to drift lower. Still, the continued series of higher lows is encouraging — it suggests buyers are stepping in on weakness. But trends can't survive indefinitely without progress, and at some point the stock must prove it can set a new high to justify continued optimism. The burden of proof sits with the bulls, and a strong earnings report would go a long way toward shaking the stock from its slumber. As we'll see below, expectations are high that 2026 could be a solid year for Amazon. Option #1: Back the Catch-Up Trade The more aggressive approach is to buy ahead of earnings if you believe the market is underpricing Amazon. The idea is that a solid report would trigger a catch-up rally after the stock underperformed in 2025 while the broader market advanced. Analyst support so far this year reinforces that view. Recent reiterations and upgrades — from firms such as Scotiabank and New Street Research — include price targets ranging from the mid-$260s to $350, which supports the argument that AMZN is materially undervalued. Even with rising geopolitical risk, some, including Wedbush, continue to argue that large-cap tech, Amazon among them, remains an attractive allocation. This approach accepts the volatility that often surrounds earnings and is about positioning early and trusting the longer-term story. Option #2: Wait for Confirmation The cautious strategy is to stay on the sidelines until earnings reduce some of the uncertainty. After trading sideways for so long, Amazon has eroded some investor confidence, and there's a legitimate argument that the stock needs to prove growth hasn't stalled before it can move higher. This approach also accounts for macro risk. With markets sensitive to geopolitical headlines, even a decent report could produce a muted market reaction if it doesn't check every box. Waiting helps avoid a potential sell-the-news move and allows entry once the direction is clearer. The trade-off is that clarity often comes at a higher price. If Amazon spikes back toward the $260 level on strong numbers, latecomers may be forced to chase the rally.
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