Tech giant Amazon.com (NASDAQ: AMZN) has been one of the more frustrating large-cap names to watch and to own in recent months. Shares of the Seattle-based company are currently trading around $210, roughly the same level as in November 2024, meaning the stock has effectively gone nowhere in 18 months despite a strong broader market backdrop. For context, the S&P 500 has gained 10% over the same period, and that’s including the index's recent selloff.
Expectations of a marked turnaround in 2026 had been high for the Magnificent Seven fixture. But instead, the stock's underperformance has persisted, with AMZN dropping as much as 20% through its February earnings and remaining down in the two months since. More recently, the war in Iran has added fresh headwinds, pushing oil higher and reigniting concerns around inflation, consumer spending, and tech valuations.
What makes the current setup particularly challenging is how quickly the narrative can shift. Markets are reacting not just to developments on the ground, but to changing expectations around how and when the conflict might de-escalate, with sentiment swinging sharply on each new signal, be it a social media post from the president or a statement issued by the Iranian regime.
However, if tensions do show signs of easing, it could drive a sizable retracement in oil prices and a subsequent cooling of concerns about inflation. Easing of headwinds like that could be just what Amazon needs heading into its next earnings report in a few weeks.
Let’s jump in and take a closer look at what that could mean and how it could look.
Why the Macro Background Matters More Than Usual
The surge in oil prices since the war started on Feb. 28 has had a broad and significant impact across markets. Higher energy costs feed directly into inflation expectations, which in turn put pressure on interest rates and compress valuation multiples, particularly for tech stocks like Amazon.
However, for the e-commerce and cloud computing provider, the impact isn’t limited to valuation. Elevated fuel costs also erode consumers’ budgets, reducing discretionary spending and creating a second layer of pressure on Amazon’s core e-commerce business. This is what makes the current situation particularly nuanced for the company.
In the event of tensions easing and oil prices beginning to retrace, those dual pressures would then start to unwind simultaneously. That’s a powerful combination for bulls to be thinking about.
A Pre-Earnings Move Could Be Sizeable
The setup is made all the more interesting given how Amazon is expected to deliver its next earnings report on April 23. With the stock already absorbing significant negative sentiment in 2026 while still trading 10% below where it began the year, expectations for its earnings are likely lower than usual. However, excluding the company's miss during its last report, Amazon had beaten analyst expectations for 11 consecutive quarters dating back to Q1 2023.
At the same time, analyst support for Amazon is steadfast. Wells Fargo just reiterated a Buy rating on the stock while raising its price target to $305, implying more than 40% potential upside from current levels. That follows a steady run of bullish updates through March, reinforcing the idea that Amazon's long-term story remains intact despite near-term pressures. This creates an attractive risk-reward dynamic heading into its earnings, especially if expectations of the war's conclusion increase.
A big part of that confidence stems from what analysts see under the surface. Wells Fargo didn’t just call the stock a Buy and raise its price target; it also named Amazon its top internet pick for 2026, with improving cloud momentum suggesting its investments may finally be translating into returns. If that narrative holds, the stock doesn't need perfection at earnings—just confirmation that things are moving in the right direction.
The Risk Is Still Considerable
The risk, of course, is that the macro situation does not cooperate. If oil remains elevated or moves higher, inflation concerns are unlikely to subside, which will keep pressure on both Amazon's valuation multiples and consumers' discretionary spending. That would create a more difficult backdrop heading into fiscal Q1 earnings, particularly given the existing concerns around Amazon’s rising capital expenditure (CapEx).
The company’s push into artificial intelligence (AI) remains a central part of the investment thesis, but it’s also one of the biggest sources of uncertainty. The scale of CapEx required by AI has raised questions about Amazon's near-term profitability, and investors will be looking closely for any signs of an emerging payoff in the upcoming report.
If those signals are absent and macro conditions remain difficult, the stock could struggle to break out of its recent range, regardless of broader sentiment shifts. Promisingly, with a trailing 12-month price-to-earnings ratio of 29.26, Amazon's earnings are expected to grow nearly 18% over the next year.
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The article "Could Easing Iran Tensions Trigger an Amazon Pre-Earnings Rally?" first appeared on MarketBeat.
