Key Takeaways
- Amazon shares are in focus after Reuters reported that the company’s cloud computing arm, AWS, is in discussions with Italy to invest billions of euros to bolster its data center business in the country.
- The reported investment comes at a time when AWS has recently pledged billions of dollars of cloud investments in Spain and Germany as it expands its cloud computing offerings across Europe.
- A breakout in Amazon shares above crucial resistance around $188 would likely see the stock’s upside momentum continue, while a failure to do so could lead to a retest of support around $170.
Amazon (AMZN) shares are in focus after Reuters reported Monday that the company’s cloud computing arm, Amazon Web Services (AWS), is in discussions with Italy to invest billions of euros to bolster its data center business in the country as it continues its cloud expansion through Europe.
According to people familiar with the matter, the discussions relating to the size and location of the investment remain ongoing, though one source said AWS has plans to expand its current operations or build new facilities in Milan.
AWS, whose Italian customers include luxury sports car manufacturer Ferrari (RACE) and European insurance giant Assicurazioni Generali, established its initial cloud region in Italy in 2020 as part of a broader plan to invest 2 billion euros ($2.17 billion) in the country by 2029. At the time, AWS said the investment will provide infrastructure for Italian companies to leverage advanced technologies such as analytics, artificial intelligence (AI), database, and internet of things (IoT).
Elsewhere in Europe, AWS recently earmarked a 15.7 billion euros ($17.06 billion) investment to expand data centers in Spain and has pledged a 7.8 billion euros ($8.48 billion) cloud investment in Germany. While the cloud provider’s investment in Italy is expected to be in the billions, it may be smaller than its Spanish plans, the report said. Over the past year, AWS has stepped up its efforts across Europe to sign up resource-intensive telecom customers, recently inking a deal with Germany’s Telefonica Deutschland (TELDY).
Monitor This Crucial Level on the Weekly Chart
Zooming out to the weekly chart, Amazon shares have remained in a steady uptrend since early January last year, with the move higher confirmed by the 50-week moving average (MA) crossing above the 200-week MA in March this year to form a bullish golden cross signal.
Looking ahead, investors should keep a close eye on the $188 level, an area that has posed significant resistance since mid-2021. A convincing volume-backed breakout above this important level would likely see the upside momentum continue, while a failure to do so may lead to a retest of support around $170 from a trendline stretching back to the January 2023 swing low.
Amazon shares closed last week at $180.75.
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