Amazon is set to release its third-quarter earnings on October 29, 2026, and investors are bracing for potential volatility. The stock has shown significant movement following past earnings reports, including a 15% surge after the July 2026 report and a 6% drop after the February 2026 report. Currently trading around $252, Amazon's stock is about 11% below its August 2026 high of $284.02.
The company's cloud computing segment, Amazon Web Services (AWS), has seen accelerating sales growth for five consecutive quarters, reaching 37% in the second quarter of 2026. This strong performance has contributed to Amazon's overall operating income, which hit $27.5 billion in the most recent quarter, up 43% year over year.
Given the uncertainty surrounding the upcoming earnings report, one strategy suggested is to split the purchase of Amazon stock into two halves: one before the report and the other after. This approach aims to mitigate potential losses from a negative reaction while still allowing participation in any positive gains.
While Amazon's stock is not considered cheap, trading at around 24 times expected 2027 earnings, its strong business fundamentals make it an attractive long-term hold. However, any significant shifts in AWS growth or operating income could prompt a re-evaluation of the investment.