Amazon Earnings Due Soon. Can AWS Match Microsoft, Google Cloud Beats?

Core Viewpoint - Amazon's upcoming third-quarter report is overshadowed by recent negative headlines, including an AWS outage and significant layoffs, but the primary focus for investors remains on the company's AI capabilities and performance in the cloud computing market [1][2]. Group 1: AWS Performance - Amazon Web Services (AWS) is perceived to be lagging behind competitors like Microsoft and Google in the AI-driven demand for computing power, leading to tempered expectations for AWS's sales growth [2][3]. - Analysts expect AWS sales to reach $32.4 billion, reflecting an 18.1% growth, which is only a slight increase from the previous quarter's 17.5% growth rate [4][5]. - The disparity in sales growth between AWS and its competitors has negatively impacted Amazon's stock performance, particularly following the Q2 report [4][3]. Group 2: North America Operations - Amazon's North America retail operations, which account for approximately 60% of total sales, are projected to generate $105.1 billion in sales, marking a 10% year-over-year increase [6][7]. - Analysts suggest that third-party data indicates Amazon's North America retail segment may outperform Street estimates by 1%-2% [7]. - Overall earnings for the September-ended period are forecasted at $1.57 per share, a 10% increase, with total sales expected to rise 12% to $177.91 billion [7]. Group 3: Market Sentiment and Stock Performance - Despite recent challenges, approximately 96% of Wall Street analysts rate Amazon stock as a buy or equivalent, indicating a generally positive outlook [9]. - Amazon's stock is currently in a cup base formation with a buy point at 238.85, and it holds an IBD Composite Rating of 88 out of a possible 99 [10].