Amazon & Google: The Easy Money Is Gone. The Opportunity Isn’t.

Strong businesses. Tighter entry points.

Every few quarters, markets force a reset. Not because earnings collapse, but because expectations move faster than reality.

That’s where we are now with large-cap tech.

Cloud demand is re-accelerating, AI spending is real, and cash flows across the hyperscalers are improving. At the same time, prices have already repriced much of that optimism. The easy phase is over. What matters now is understanding where earnings durability is coming from, how much of it is priced in, and how patient capital should behave when momentum fades.

Today we’re looking at Amazon AMZN 0.00%↑ and Alphabet GOOG 0.00%↑. Two dominant platforms. Two very different technical setups. Both central to how institutional investors are positioning for the next leg of AI-driven growth.

Key Takeaways

• Amazon’s fundamentals have quietly strengthened over the past year.

• AWS growth has stabilized and is re-accelerating with AI workloads, advertising has become a structurally meaningful profit engine, and free cash flow has turned decisively positive.

• The stock, however, is no longer trending. It’s consolidating. That creates opportunity, but only for investors willing to respect levels and wait for confirmation.

• Alphabet remains a high-quality compounder with strong cash generation and improving cloud profitability.

• The business is executing, but the stock has already reflected much of that progress.

• Price is digesting gains, momentum has cooled, and entries matter more than conviction.

• This is a stock to approach with discipline, not urgency.

Amazon

A platform rebuilding earnings power beneath the surface

Why Amazon matters here

Amazon is no longer trading as a retail growth proxy. The market is gradually repricing it as a multi-engine earnings platform, and that transition is happening while price moves sideways.

That combination is important. When fundamentals improve faster than price, longer-term asymmetry can quietly rebuild.

Pipeline, backlog, and business momentum

AWS remains the core profit driver. After a period of customer optimization, revenue growth has stabilized and begun to re-accelerate. AI-related workloads are now a material contributor, both from model training and inference. Importantly, this demand is incremental. It is not replacing existing cloud spend, but layering on top of it. AWS backlog remains elevated, providing visibility into forward revenue even as customers remain cost-conscious.

Advertising continues to be one of Amazon’s most underappreciated assets. Sponsored listings and brand ads are embedded directly into purchase intent, which makes this revenue stream both resilient and high-margin. Advertising revenue has been growing materially faster than the overall business, and because it requires minimal incremental capital, it meaningfully lifts Amazon’s blended return profile.

Retail and logistics are no longer the drag they were in 2022 and early 2023. Fulfillment costs have stabilized, regionalization has improved delivery efficiency, and capex intensity has normalized. Retail does not need to drive margins higher. It simply needs to remain cash-flow positive. That condition is now met.

The near-term catalysts are not headline-grabbing. They are operational. Continued AWS margin stability, incremental AI-driven cloud demand, and advertising growth flowing directly to operating income.

Fundamental analysis

Amazon’s revenue growth profile is steadier than it was two years ago, but the more important shift is earnings quality.

Operating margins have recovered meaningfully from post-pandemic lows. That recovery has been driven by cost discipline in fulfillment, a more rational capex cycle, and a richer mix of high-margin revenue from AWS and advertising.

Free cash flow has turned decisively positive again. That is a structural change, not a quarterly fluctuation. Amazon now generates cash while investing heavily in growth, rather than funding growth through balance sheet expansion.

The balance sheet remains conservative relative to scale. Net debt is manageable, liquidity is ample, and there are no refinancing pressures. Amazon has the flexibility to invest aggressively in AI infrastructure without compromising financial stability.

Amazon has moved into a higher-quality earnings phase. The business is stronger and more resilient than the stock’s recent sideways movement suggests.

Technical analysis

On higher timeframes, Amazon remains in a primary uptrend. Long-term trend support is intact, and the sequence of higher lows has not been violated.

On intermediate timeframes, the stock is consolidating between roughly the low 220s and the mid 230s. Momentum indicators are neutral, volatility has compressed, and price is oscillating around key trend measures. This is characteristic of digestion, not distribution.

Shorter timeframes show repeated defenses of the same demand zones, suggesting institutional accumulation rather than aggressive selling. At the same time, upside attempts have stalled at consistent resistance, reinforcing the range-bound nature of the setup.

Amazon is resting. It is not broken, but it is not ready to trend without confirmation.

Alphabet

Strong execution, tighter margins for error

Why Google matters here

Alphabet is doing many things right operationally, but the stock has already responded. That shifts the question from business quality to entry quality.

Pipeline, backlog, and business momentum

Google Cloud has crossed an important inflection point. It is no longer a loss-making growth engine. Operating profitability has improved, backlog has expanded, and customer demand remains strong, particularly for AI-enabled workloads. This gives Alphabet far better visibility into future cloud revenue than it had just two years ago.

Advertising remains resilient across Search and YouTube. AI-driven enhancements are increasingly embedded into products, supporting engagement and monetization rather than undermining them. Importantly, these improvements are being layered onto an already massive user base, which limits execution risk.

Capex remains elevated as Alphabet invests heavily in AI infrastructure. However, spending is now more targeted, and management has shown discipline in pacing investment alongside demand.

The catalyst path here is steady rather than explosive. Continued cloud margin expansion and evidence that AI investment translates into durable earnings growth, not just scale.

Fundamental analysis

Alphabet’s revenue growth remains healthy, but the defining feature of the business is cash generation.

Operating margins have stabilized even as AI-related spending remains high. Free cash flow is robust, giving Alphabet the ability to invest, repurchase shares, and maintain strategic optionality simultaneously.

The balance sheet is exceptionally strong. Net cash, no funding constraints, and significant flexibility across cycles.

Valuation reflects this quality. Alphabet does not trade at distressed levels, but it also does not embed heroic assumptions. The challenge is not valuation, but timing.

Alphabet is a high-quality compounder. The business deserves a premium, but the stock requires patience.

Technical analysis

On higher timeframes, Google remains in an established uptrend, but price has entered a consolidation phase after a strong multi-year advance.

Intermediate timeframes show momentum flattening and volatility compressing. Upside attempts have lacked follow-through, while pullbacks have remained controlled. This is typical of late-stage digestion.

Shorter timeframes remain choppy, with failed breakouts and shallow retracements. That combination favors selective entries rather than aggressive positioning.

Google is not weak, but it is no longer forgiving. Structure must lead decision-making.

Our Trade Plans

Alphabet

Higher timeframe trend is still up, but price is backing off the recent peak and sitting on a tight decision shelf (303 to 311) where momentum can flip quickly.

Pullback entries

• 303.6 to 300.0 Base support shelf: 4H Fib support and the first place you want buyers to defend to keep the structure “bullish correction, not reversal.”

• 295.0 to 292.0 (stretch entry) The “line in the sand” demand pocket: if price trades here, it’s testing the deeper swing support that must hold to avoid a full trend reset.

Breakout entry Daily close above 319.7 to 322.5
That’s the supply ceiling: reclaiming it signals the pullback is complete and trend continuation is back in control.

Stop 291.9 (weekly close below) This level is structural: lose it and the entire post-run correction is no longer a controlled pullback, it becomes a regime change.

Targets

• Short-term (current swing)

  • 308.5 First overhead magnet: nearby extension level and the “prove it” reclaim point.

  • 313.3 to 315.3 Mid-band supply: if price stalls here, it’s telling you the bounce is corrective, not impulsive.

  Medium-term (trend development)

  • 319.7 to 322.5 Prior swing ceiling: clearing it is what reopens upside cleanly.

  • 338.7 Next expansion target once price is back in trend mode.

  Long-term (higher timeframe)

  • 355.3 Higher timeframe extension target.

  • 370.0 Larger supply marker where trend often pauses.

  • 408.1 Stretch target: requires a full continuation leg, not just a bounce.

• Rolling stop mechanic

  • If 308.5 hits, raise stop to just under 303.6 (the first defended higher low zone).

  • If 315.3 hits, trail stop to just under 310.8 (the mid-structure pivot that should hold in a healthy continuation).

  • If price breaks out and holds above 322.5, trail stop under 315.3 (old resistance should act as support in a real trend resumption).

    

  Position sizing: Define risk by the distance from entry to 291.9 (or to the nearest structural stop you’re using). If the stop is far, size down. If entry is closer to a structural support shelf and the stop is tighter, size can be larger. Risk is the stop distance, not conviction.

  Summary: Risk/reward is best on pullbacks into 303 to 300, acceptable on a clean reclaim above 320, and weakest if chasing in the middle. The trade stays valid as long as price holds the 303 shelf and does not lose 291.9. Key invalidation: 291.9.

Amazon

Higher timeframe is still constructive, but AMZN is in a post-peak digestion range, with momentum muted and a real downside path if support shelves fail.

Pullback entries

• 224.3 to 220.3
  Core demand zone: repeated retracement support and the area where a base can rebuild without breaking the range.

• 215.2 to 211.4 (deep value entry)
  Structural support: if price trades here, it’s testing the weekly floor that must hold to prevent a larger unwind.

Breakout entry Daily close above 233.4 to 236.0 Range reclaim trigger: signals the market is accepting higher prices again and reduces the odds of rolling into the deeper support targets.

Stop loss 211.4 (weekly close below) That level is the range floor. Lose it and the probability shifts toward a deeper retracement sequence rather than “healthy consolidation.”

Targets

Short-term (current swing)

• 233.4 to 236.0 First supply shelf: where rallies often fail inside a range.

• 240.1 Next overhead marker: prior resistance band that confirms improving acceptance.

Medium-term (trend development)

• 257.9 Bigger retracement target: getting here typically requires momentum flipping back into an up-regime.

• 270.5 Next expansion shelf where sellers typically reappear.

Long-term (higher timeframe)

• 286.6 Major higher-timeframe objective (requires trend resumption, not just chop).

• 307.0 Longer extension target if a full leg develops.

• 333.0 Stretch extension: would imply a sustained trend phase.

Rolling stop mechanic

• If 236 hits, raise stop to just under 224.3 (range support should not break on a real upside attempt).

• If 240.1 hits, trail stop to just under 229.9 (reclaimed mid-band should hold if the breakout is real).

• If 257.9 hits, trail stop under 240.1 (structure shifts from range to trend attempt).

  

Position sizing: Pick the entry first, then size off the stop distance to 211.4 (or the closest structural level you’re using). Wider stop means smaller size. Better location (buying support, not chasing the middle) is what improves the whole plan.

Summary: Best risk/reward is buying support (224 to 220) or buying the deep floor (215 to 211), not chasing the middle of the range. The trade stays valid if price holds 224 on pullbacks and absolutely must hold 211.4 on a weekly basis. Key invalidation: 211.4.

Bottom Line

Amazon and Google are both exceptional businesses. That part is easy.

The harder part is recognizing that price behavior now matters more than narratives.

Amazon is quietly rebuilding earnings power while price consolidates. That creates opportunity for patient investors who respect structure and wait for confirmation.

Google continues to execute, but the stock needs time. The margin for error is smaller, and discipline matters more than enthusiasm.

This is not a market that rewards chasing strength.
It rewards preparation, patience, and letting price confirm the story.

That’s how durable returns are built.

This content is for informational and educational purposes only and reflects our views at the time of writing. It is not investment advice or a recommendation to buy or sell any security. Markets involve risk, prices can move against you, and outcomes are never guaranteed. Always do your own research and consider your risk tolerance before making investment decisions.