Amazon also releases earnings after the close on Thursday and analysts will have an eye on cloud growth and the recent Prime day sales event.
AMZN stock found some support around $182 and that will be the key level for the stock this week.
Supporting Amazon’s e-commerce dominance has been the company’s advertising services and cloud expansion through its Amazon Web Services (AWS). Advertising services revenue for Q2 is expected to rise 22% to $13 billion with AWS revenue expected to gain 17% to $25.86 billion. Amazon is still the largest cloud provider ahead of Microsoft and Alphabet. Overall, Q2 sales are thought to have risen by 10% to $148.63 billion versus $134.38 billion in the year ago quarter.
The Q2 earnings per share performance is expected to be an increase of 63% to $1.03 compared to $0.63 per share a year ago. Estimates say Amazon could surpass earnings expectations up to $1.08.
Analyst Nick Jones said Amazon’s prospects after Microsoft’s report means investors expect about 18% growth from AWS before Microsoft’s earnings.
“We do not believe Amazon’s AWS business is likely to have the same capacity constraints as Microsoft’s Azure business, therefore positioning AMZN to deliver stable-to-accelerating AWS growth trends through the rest of the year,” Jones wrote. “Accordingly, we are incrementally positive and believe it is likely increasing share gains.”