Diverging Signals: Major Funds Exit Amazon as Technical Outlook Turns Bullish

Amazon US0231351067

Amazon shares find themselves at a curious crossroads, caught between institutional selling pressure and a historically bullish technical setup. While prominent hedge funds are trimming their stakes, chart patterns and analyst projections paint a contrasting picture of potential growth ahead.

The broader analyst community remains firmly optimistic on Amazon's equity. The consensus recommendation stands at "Strong Buy," with average price targets clustering around $298. The stock currently trades well above its 52-week low of $161.38, though it faces resistance on its path toward the $260 level. Notably, options market volatility remains subdued, indicating that traders do not anticipate extreme price swings despite the ongoing consolidation phase.

A Notable Institutional Exit

A significant shift has occurred at Citadel Advisors, the hedge fund led by Ken Griffin. Recent 13F filings reveal that Griffin sold a substantial 2.1 million Amazon shares during the third quarter, reducing the fund's position by 39 percent. This move marks a stark departure from a previous strategy of accumulation. Reports suggest the freed-up capital is being redirected toward more speculative ventures, such as quantum computing plays like Rigetti Computing. The message from some large players appears clear: after a prolonged rally, they are locking in profits and searching for higher returns elsewhere.

Technical Indicators Flash a Buy Signal

In direct contrast to the institutional selling, technical analysis is triggering a bullish scenario. Amazon's share price is currently trading just 3 percent above its 12-month moving average. According to Schaeffer's Investment Research, this specific configuration has occurred 22 times over the past two decades.

Historical data following this signal is compelling:
* Shares experienced a price increase over the subsequent three months in 68 percent of instances.
* The average gain following this signal was 7.8 percent.

This optimistic technical perspective is bolstered by fundamental analysis. Truist Securities forecasts a growth rate of 10.5 percent for 2026, driven by efficiency gains within the delivery network and the deployment of generative AI to enhance personalized shopping experiences.

Operational Adjustments and Executive Moves

Amazon is making strategic adjustments on multiple operational fronts. In a move highlighting disciplined capital allocation for infrastructure, the company withdrew from a planned data center project with Fermi America in Texas, terminating a $150 million financing agreement.

Concurrently, the tech giant continues to see executive talent depart for competitors. Starbucks has recruited Anand Varadarajan, a 19-year Amazon veteran who most recently led technology for the company's worldwide grocery business, to become its new Chief Technology Officer. Varadarajan is scheduled to assume his new role in January.