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More Reading from MarketBeat Media Amazon Erases a Year of Gains—2 Reasons the Market's WrongSubmitted by Sam Quirke. Originally Published: 2/16/2026. 
Key Points - Amazon shares are down more than 12% this year and over 20% from November’s all-time high, drifting back toward levels last seen nearly a year ago.
- The stock’s RSI has sunk into the low 20s, marking one of its most oversold readings in almost four years.
- Analyst support remains overwhelmingly bullish, with price targets implying close to 60% upside from current levels.
- Special Report: [Sponsorship-Ad-6-Format3]
After months of steady pressure that intensified in recent weeks, Amazon.com Inc (NASDAQ: AMZN) is back to where it was at the start of last March. Not only are shares down more than 12% this year, they’re also more than 20% below November’s all-time high—effectively wiping out the gains of the past 12 months. For a company with so many fundamental strengths, the stock simply can’t seem to catch a break. Investors have been rotating out of mega-cap tech, concerns about Amazon’s capital expenditure plans have mounted, and sentiment across the sector has cooled materially. But beneath the surface the current setup is beginning to look extreme. Here are two reasons to believe the market may have gone too far. Reason #1: The Stock Is Extremely Oversold The technical picture is flashing oversold. Amazon’s relative strength index (RSI) has slipped into the low 20s, its lowest reading in nearly four years. That degree of oversold pressure is rare for this stock, particularly since the company has consistently delivered strong earnings and reinforced its growth story over the same period. Historically, when Amazon’s RSI has fallen this far—below the 30 threshold of technical exhaustion—it hasn’t stayed there long. Such readings have tended to mark temporary lows rather than the midpoint of a sustained breakdown. In April of last year, for example, a brief dip below 30 on the RSI preceded a rally of roughly 60%. In August 2024, another sub-30 reading was followed by a comparable move. Go back to November 2022 and the rebound was even more dramatic. History doesn’t have to repeat itself, but patterns often rhyme. When sentiment has become this one-sided in the past, it has signaled a buying opportunity. If Amazon shares can stabilize in the coming sessions and the RSI begins to turn higher, that would be an early sign that bullish accumulation is returning. Reason #2: Analysts Are Not Backing Down If the technical case is compelling, the analysts’ fundamental support makes the setup harder to ignore. Rarely do you see such a wide disconnect between how the market is treating a stock and where analysts expect it to go. A slide of this magnitude would normally trigger a wave of rating downgrades as analysts reassess their outlooks. Instead, the opposite has happened. In the past week, teams at Daiwa Securities Group and New Street Research reiterated Buy ratings, while Argus did the same the week before. Price targets among the bullish camp reach $325, which, with the stock trading below $200, implies roughly 60% in potential upside. That kind of asymmetry is difficult to dismiss, especially for one of the leading mega-cap tech companies. Analysts cite near-universal conviction in the strength of Amazon’s AWS business, where growth appears to be accelerating. Combine that with the company’s e-commerce moat, diversified revenue streams, and expanding advertising footprint, and the long-term investment thesis remains intact. Watching for the Turn Concerns about increased capital expenditures were clearly a catalyst for the recent selloff. But at current levels much of that fear looks priced in. The pullback has pushed Amazon’s price-to-earnings (P/E) ratio below 30 for the first time in years, making the valuation materially more attractive than it has been in some time. It would be hard to sustain a broadly bullish stance if analysts were abandoning ship; instead, many are doubling down. For now, the setup hinges on stabilization. If the stock shows signs of holding near current levels and begins carving out a base instead of sliding to fresh lows, the bullish case strengthens quickly. With shares pressing toward a 52-week low, the RSI at multi-year extremes, and analysts forecasting as much as 60% upside, the risk/reward profile looks compelling.
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