Amazon Earnings Preview: Amazon Stock Plummets ahead of Q3 earnings

Amazon Stock: Ahead of the release of third-quarter results after the close, Amazon (AMZN) lost 2.6% at the opening of trading on Thursday to trade at $112.65. Two sets of encouraging economic statistics seem to have little impact.

The third quarter’s annualized US GDP came in at 2.6% YoY, above expectations. 2.4% was what analysts predicted.

Similar results were seen in the preliminary Personal Consumption Expenditures Prices for Q3. Instead of the predicted 7.9% growth, the QoQ data showed prices increasing by 4.2%.

The market, however, is in a particularly negative frame of mind after Meta Platforms (META) dropped 22% at the start after the release of troubling results late Wednesday.

Amazon earnings preview

First and foremost, Wall Street anticipates Amazon to report GAAP EPS of $0.21 and revenues of $127.48 billion. Comparatively, the e-commerce behemoth recently recorded a loss of $-0.20 on revenues of $121.23 billion.

When EPS missed a startling 32 cents the last time around, the business shocked the market. Amazon reported $0.31 EPS in the prior-year quarter on $110.81 billion in sales. Amazon’s revenue growth has slowed down for five consecutive quarters.

The company’s cloud infrastructure division, Amazon Web Services (AWS), will be the main topic of discussion on Thursday night.

According to the observations of several experts, AWS seems to need to provide at least 30% YoY growth in the cloud sector to win over the market.

Due to the company’s primary rival Microsoft, the share price could be slightly erratic in the weeks before results (MSFT).

The latter’s Azure cloud product, reported only a day earlier, rose by 35% YoY in the most recent quarter compared to 40% YoY in the preceding quarter (calendar Q2). Investors are concerned that the slowdown in cloud computing might affect AWS’s bigger operations.

The market will be interested in further information on the company’s recent Prime Day event on the e-commerce front.

Analysts will change their predictions for the Q4 Christmas season, when sales generally increase by more than 30%, resulting from the insights presented here.

Currently, most experts believe that management’s advice would be rather cautious since a recession in the US economy would undoubtedly affect the Christmas shopping season.

24 of 31 analysts have lowered their third-quarter projections due to EPS adjustments over the previous quarter.

However, JPMorgan has noted that Amazon stock has declined far more than the S&P 500 during the most recent quarter, making Amazon a more appealing purchase at a current price point.

Amazon stock forecast

The price of Amazon stock seems to be headed for a little decline today before finding support between $101 and $109.50.

This demand zone brought back AMZN shares 12 times from May through October. The resistance levels on the upside that traders need to be aware of in the event of a beat and raise scenario are $121, $136, and $145.

Amazon has very long-term support at $86 and $81 in the case of a huge miss, but we find it difficult to see that happening.

A mixed quarter is most likely to occur, sending the price of AMZN shares back into the $101 to $109.50 range, where institutions will once again pounce on the opportunity.