Tonight is like the Super Bowl for technology sector earnings, with Amazon.com, Inc. (AMZN), Google parent Alphabet Inc. (GOOG), Intel Corporation (INTC) and Microsoft Corporation (MSFT) all scheduled to report results after the close. Out of this group, Amazon's results could attract particular attention from traders.
Amazon's price chart shows that the shares have tended to stage significant moves following the company's earnings releases, depending on the direction and size of the surprise. After a big miss last quarter, Amazon shares sold off, and they have spent the past three months trending sideways and underperforming broader U.S. indices. This comes as a big change after the shares outperformed the market through the first half of 2016. (See also: How Wal-Mart Is Beating Amazon At Its Own Game.)
This earnings report comes at a critical time for the shares and could have a big influence on sentiment heading toward the key holiday selling season. The huge number of layoffs and store closures across the traditional retail sector this year indicates that the online shopping sector, led by Amazon, has continued to do extremely well overall, but expectations are now extremely high as well.
Beyond the results and guidance numbers, traders may look for color from the company related to the Whole Foods acquisition, President Trump's moves toward expanding the use of drones in U.S. airspace and other initiatives like the company's desire for Prime customers to allow delivery people access to their homes. (See also: Amazon Can Now Deliver to Unattended Homes.)
For the past three months, Amazon shares have been range bound between $930 and $1,025. The stock recently established a higher low near $960 and has been trading closer to $975 heading into the report. Before the previous earnings report, the shares were trading closer to $1,075, so expectations are not quite as high this time around.
Street estimates vary, with Bloomberg.com indicating an average earnings per share expectation around $0.04 and NASDAQ.com indicating an average around $0.13. Sales results and guidance may also have a significant impact on trading. A positive result could send the shares back up through $1,000, while a negative result could send the shares back toward a retest of the channel bottom. (For more, see: Amazon Set for 'Spectacular Collapse'.)
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