Nasdaq 100: Amazon Earnings Today – Will It Finally Surpass Walmart in Revenue?

Amazon Earnings: Will Cloud Growth and Holiday Sales Power the Stock Higher?

That said, Amazon’s cloud unit may be in a stronger position. It has been more strategic in AI investments, focusing on efficiency rather than aggressive spending. Analysts believe AWS may be regaining market share, which could provide a bullish catalyst if confirmed in the report. If AWS growth holds up, the stock could get a lift. But any signs of weakness could weigh on sentiment.

Did a Strong Holiday Shopping Season Boost Retail?

Amazon’s e-commerce business is expected to benefit from a robust holiday season. U.S. consumers spent over $240 billion online between November and December, with spending growth nearly doubling from the prior year. Analysts project Amazon’s North American sales to rise 9% year-over-year.

Faster delivery times, expanded product offerings, and strong demand for discounts likely played a role. Rival retailers, including Target, have already issued positive outlooks, further signaling a strong consumer environment. If Amazon’s retail segment exceeds expectations, it could provide an additional boost to the stock.

Will AI Spending and Guidance Impact the Stock?

A key risk for Amazon is its capital spending. The company has already projected more than $75 billion in AI-related investments for 2024, raising concerns about profitability. Microsoft and Google recently faced stock declines after revealing higher-than-expected spending plans. If Amazon signals similar cost pressures, investors may react negatively.

However, Amazon’s AI strategy has been more cost-efficient, focusing on integrating AI into AWS rather than building expensive models from scratch. The upcoming launch of its Alexa AI-powered assistant could also be a potential growth driver. If Amazon reassures investors with a disciplined spending plan, it could help offset concerns.

Market Reaction: What Will Move the Stock?

Amazon’s report will be a major test for both cloud growth and consumer spending trends. If AWS beats expectations and retail remains strong, the stock could rally. However, signs of slowing cloud growth, excessive capital spending, or weak guidance could lead to selling pressure.

With Amazon trading at a forward P/E of 39—higher than Microsoft (29) and Alphabet (22.4)—investors will demand strong execution to justify its valuation. The post-earnings reaction will largely depend on whether Amazon can deliver where its rivals have fallen short.

More Information in our Economic Calendar.