Amazon Stock: What to Watch Ahead of Q4 Earnings

Amazon Stock

Amazon Stock (NASDAQ:AMZN)

Amazon (NASDAQ:AMZN) is set to release fourth-quarter 2022 results on February 2. Amazon stock has gained more than 16% year-to-date.

The company anticipates net sales of between $140 billion and $148 billion in the fourth quarter. Net sales are expected to increase 2-8% over the previous quarter’s reported figure.

The Consensus Estimate for net sales is $145.37 billion, representing a 5.8% increase over the prior-year quarter’s reported figure.

The Consensus Estimate for fourth-quarter earnings is 15 cents per share, down 11.8% in the last seven days. Furthermore, the figure indicates an 89.2% decrease from the previous quarter’s reported figure.

Earnings exceeded the Consensus Estimate in one of the previous four quarters, but missed it three times, with the average being 129.9%.

Momentum Driven by the Holidays, Prime, Retail, and Streaming

The company’s strong holiday performance, supported by strong holiday initiatives, is expected to have contributed significantly to top-line growth. Notably, during the recent holiday season, its selling partners experienced record-breaking sales.

Amazon’s expanding distribution network, Prime-enabled fast delivery, and robust grocery services are expected to help its online retail business perform well in the fourth quarter.

The Prime Free One Day service, Amazon Fresh, and Whole Foods Market’s robust two-hour delivery service of natural and organic products such as meat and seafood, fresh produce, and staples are expected to have continued driving customer momentum in the current quarter.

Its expansion of Same-Day Delivery, which allows Prime members to receive their orders within five hours, to more cities in the United States is expected to be a big plus.

The company’s expanding global e-commerce business, as well as Prime’s expanding global footprint, are expected to have made a significant contribution.

Its aggressive approach to increasing physical presence is expected to benefit quarterly performance.

The company’s fourth-quarter sales are expected to have been boosted by an expanding footprint of Amazon Fresh grocery stores, 4-star stores, and Amazon Go outlets across the United States.

Amazon’s expanding fulfillment network is also likely to have contributed.

In terms of streaming services, strong momentum across Prime Video is expected to have been a significant tailwind in the soon-to-be-reported quarter. Expanding Prime Video’s original content and overall content portfolios are likely to have increased Prime engagement.

Furthermore, gains from Amazon Music’s growing momentum are expected to be reflected in the company’s fourth-quarter results.

Amazon Music expanded its offerings to Prime members in the to-be-reported quarter, unveiling a catalog of 100 million songs and the top podcasts, which are available ad-free and at no additional cost.

AWS Portfolio Strength

The company’s expanding Amazon Web Services (AWS) portfolio is expected to have aided performance in the fourth quarter.

AWS introduced a new data management service, Amazon DataZone, in the fourth quarter, which simplifies data management and allows data producers to seamlessly govern data access.

Furthermore, the company strengthened its ML capabilities by introducing eight new Amazon SageMaker capabilities, including Role Manager, Model Cards, Model Dashboard, new data preparation, collaboration across data science teams, automated model validation, geospatial capabilities, and automatic conversion of notebook code into production-ready jobs.

Aside from that, the company introduced five new database and analytics capabilities: Amazon DocumentDB Elastic Clusters, Amazon OpenSearch Serverless, Amazon Athena for Apache Spark, AWS Glue Data Quality, and Amazon Redshift, which now supports deployments across multiple AWS Availability Zones.

Amazon Security Lake, a purpose-built security data lake, was announced as a new service by the company. It centralizes an organization’s security data from the cloud and on-premises sources into a purpose-built data lake automatically.

It also announced AWS SimSpace Weaver, a fully managed compute service that allows customers to deploy spatial simulations to model dynamic systems with many data points.

It also announced a new cloud application called AWS Supply Chain, which provides businesses with improved supply chain visibility.

In addition, it launched AWS Clean Rooms, a new analytics service that allows customers to analyze and collaborate on large datasets without revealing the underlying data.

AWS also announced five new Amazon QuickSight capabilities and a new serverless option for Amazon Neptune, dubbed Amazon Neptune Serverless.

We anticipate that all of these initiatives will have assisted Amazon in gaining customers during the current quarter. As a result, AWS’s fourth-quarter revenue is expected to have increased.

Portfolio of Smart Devices

Amazon’s robust Fire product line, portfolio of Echo smart speakers, Blink doorbells, and eero products are expected to have contributed significantly to the company’s fourth-quarter performance. Furthermore, improving Alexa features are likely to have aided Amazon in providing a better user experience, which is expected to be reflected in the company’s fourth-quarter results.


Inflationary pressures on fuel, energy, and transportation costs may have harmed Amazon’s fourth-quarter performance.

A slowdown in online shopping, increased staffing costs, foreign-currency headwinds, and supply-chain disruptions are all likely factors.

However, the effects of the increasing coronavirus-related costs are expected to be reflected in the upcoming results. All of this could negatively impact Amazon stock.

Featured Image: Unsplash @ Christian Wiediger

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About the author: Stephanie Bedard-Chateauneuf has over four years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on consumer stocks, cannabis stocks, tech stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.