Amazon earnings preview: AWS growth and Q4 outlook are the real tests

Amazon is set to report its third-quarter earnings after the US market closes on October 29, with revenue expected to reach approximately $202.1 billion, slightly exceeding the company's guidance range. Analysts identify AWS growth momentum and fourth-quarter operating income outlook as the two key indicators that will determine stock price movement. Amazon previously forecast third-quarter net sales between $197 billion and $202 billion, with operating income projected at $22.5 billion to $26.5 billion. AWS revenue grew 37% year-over-year in the second quarter to $42.23 billion, marking five consecutive quarters of accelerating growth, while market expectations for the third quarter range from 30% to 35% growth. Historical patterns show Amazon's stock rose 9.58% and 15.32% following earnings reports when AWS growth accelerated, but shares fell or stayed flat when fourth-quarter guidance missed analyst estimates by at least 7%. The company's second-quarter EPS of $5.75 was boosted by investment gains from Anthropic, not purely operational performance.