Amazon (AMZN) Q3 Earnings Drop Tomorrow: Options Traders Betting on 6.74% Price Explosion
Wall Street holds its breath as Amazon prepares to report Q3 earnings—options markets pricing in seismic moves that could shake tech portfolios.
The Volatility Gamble
Traders are positioning for a 6.74% swing in either direction, loading up on calls and puts ahead of what could be Amazon's most consequential earnings report this year. The massive bet reflects growing uncertainty about consumer spending and cloud revenue trends.
Earnings Season Roulette
Amazon's performance often sets the tone for big tech—and this quarter carries extra weight with investors questioning whether AI investments will pay off or become another capital incinerator. The options activity suggests nobody wants to be caught flat-footed.
When the numbers hit after hours tomorrow, expect either champagne corks popping or margin calls flying—because on Wall Street, they're not just betting on retail dominance, they're gambling with your retirement fund.
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The options market’s implied move reflects high expectations about the e-commerce and cloud giant’s performance amid huge AI investments.
What to Watch in Amazon’s Earnings
Investors are likely to watch for three main things in Amazon’s upcoming earnings. First, the performance of its cloud business, AWS (Amazon Web Services), especially as AMZN’s earnings report follows other tech giants such as Microsoft (MSFT), Alphabet (GOOGL), and Meta (META).
While cloud revenue growth has slowed, Amazon’s AI infrastructure push, including $75 billion in capital spending for FY25, might have provided support.
Secondly, Amazon’s ad business was a bright spot in Q2, posting strong year-over-year growth. Continued strength in this unit could help offset weakness in retail margins.
Lastly, with inflation cooling but discretionary spending still under pressure, traders are looking for signs of resilience in Amazon’s Core e-commerce business.
Analysts’ Expectations from AMZN’s Q3 Results
Wall Street is expecting Amazon to report earnings of $1.57 per share, up 10% from the same period last year. Also, analysts project revenues of $178 billion, up from $158.88 billion in the year-ago quarter.
Ahead of the earnings, UBS analyst Stephen Ju raised his price target on Amazon stock to $279 from $271 while keeping a Buy rating. He expects some impact to Q3 operating income due to the $2.5 billion Prime settlement with the FTC, but said his updated forecast still falls within the company’s guidance range of $15.5 billion to $20.5 billion.
The five-star analyst also slightly raised his estimates for Amazon’s first-party and third-party sales gross merchandise volume, as well as advertising, for 2025 through 2027. He believes investors will be focused on AWS growth, which is expected to rise around 18% year-over-year.
Interestingly, he sees potential for cloud growth to accelerate in late 2025 and into 2026 as Amazon adds more capacity through its Project Rainier.
What Is the Price Target for Amazon Stock?
Currently, Wall Street has a Strong Buy consensus rating on Amazon stock based on 41 unanimous Buys. The average AMZN stock price target of $269.24 indicates a 16.47% upside potential from current levels.
