Amazon stock rises with market ahead of earnings after close

Amazon (AMZN) stock is riding higher on Thursday in the hours before CEO Andy Jassy delivers first-quarter earnings results. At the time of writing, AMZN has garnered a 3% gain as the United States (US) stock market ignores poor economic news to rejoice in Wednesday releases by Microsoft (MSFT), up 9%, and Meta Platforms (META), up 5%.

Two separate economic data points related to a weakening US picture, which many blame on the Trump administration's tariff policy. First, Initial Jobless Claims for the previous week arrived at 241K, a noticeable increase from the previous week's 223K. Second, the ISM Manufacturing PMI for April came in at 48.7, down from March's 49 reading, and demonstrates that US industry continues to contract.

However, the stock market is forward-looking and is getting more optimistic about trade deals. Chinese media have reported in the past 24 hours that the Trump administration has reached out to Beijing to initiate trade talks, which comes after China's government officials started exempting certain semiconductor parts, pharmaceuticals and ethane from its 125% tariff on US goods. A British newspaper reported that the US has begun trade negotiations with Japan and the European Union.

Amazon earnings preview

Amazon is expected to deliver $1.36 in earnings per share (EPS) on revenue of $155.12 billion. President Donald Trump's tariffs largely accelerated after the end of the quarter, so the market expects little effect there. But management's outlook on the tariffs in Q2 is what analysts will seek to understand.

News of ocean-going vessels between China and the US West Coast falling by half in recent weeks has forced investors to contend with the possibility of an impending large pullback in sales. Rumors have arisen of third-party sellers pulling out of Amazon's annual Prime Day event, which will take place on July 16 and 17 this year.

Evercore ISI released a client note earlier in the week that argued Amazon will have to either prioritize margins or market share, but can't do both.

Jassy and company will likely focus on the new strategy of expanding its delivery service in rural areas of the US. On Wednesday, Amazon said it will spend $4 billion to expand its in-house delivery operations to more small towns, which will allow it to fulfill an additional 1 billion package deliveries annually. This is necessary since its partnership with United Parcel Service (UPS) is falling through since the latter decided to exit the low-margin agreement.

Amazon stock forecast

Amazon shares are positioned to greatly benefit from a successful beat-and-raise quarter. Though the "raise" part of that phrase is less likely due to the tariff situation, the moving averages are in close proximity. The 50-day Simple Moving Average (SMA) and its 200-day counterpart are close enough at $193 and $199, respectively.

This means any rally could foment a technical event that pushes investors into a self-fulfilling prophecy. A close above the 200-day on Friday in the regular session could lead bulls to expect a solid run to retest prior resistance surrounding $220.

If Jassy fails to impress, then expect another move back to the support at $176.92 and $166.32.

AMZN daily stock chart