How Will AMZN Stock React To Its Upcoming Earnings?

Amazon (NASDAQ:AMZN) is set to announce its earnings report on Thursday, May 1, 2025. For traders focused on events, understanding past stock responses to earnings can provide significant insights. Throughout the last five years, AMZN has encountered negative one-day returns after 60% of its earnings announcements. The median negative return during these occasions was -6.1%, with the most substantial single-day drop reaching -14%.

Traders may capitalize on these historical trends in two main ways. The first method involves evaluating these historical odds and taking a position in AMZN stock ahead of the earnings report. The second tactic centers on investigating the relationship between the immediate stock response post-earnings and its performance in the medium term, enabling post-earnings positioning.

For this quarter, consensus forecasts indicate Amazon will report earnings of $1.36 per share on revenue of $155.1 billion. This marks a notable rise compared to the same quarter last year, which reported earnings of $0.98 per share on sales totaling $143.3 billion. Amazon Web Services (AWS) is projected to be the key driver behind this revenue increase. Nevertheless, the company foresees a negative effect of roughly $2 billion due to challenges from foreign currency translation in this quarter.

From a fundamental standpoint, Amazon currently boasts a market capitalization of $2.0 trillion. Its revenue over the past twelve months totals $638 billion, and the company has proven to be operationally profitable, generating $69 billion in operating profits and a net income of $59 billion.

That being said, if you are looking for upward potential with less volatility than individual stocks, the Trefis High Quality portfolio offers a viable alternative – it has outperformed the S&P 500 and achieved returns greater than 91% since its inception.

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AMZN Stock Historical Odds Of Positive Post-Earnings Return

Here are some insights on one-day (1D) post-earnings returns:

• Over the past five years, there have been 20 earnings data points, with 8 positive and 12 negative one-day (1D) returns recorded. In summary, positive 1D returns occurred approximately 40% of the time.
• Interestingly, this percentage rises to 55% when examining data for the last 3 years instead of 5.
• The median of the 8 positive returns is 7.3%, while the median for the 12 negative returns is -6.1%

Further data concerning observed 5-Day (5D) and 21-Day (21D) returns following earnings is compiled along with the statistics in the table below.

AMZN Stock Correlation Between 1D, 5D, and 21D Historical Returns

A comparatively less risky strategy (though ineffective if the correlation is low) is to grasp the correlation between short-term and medium-term returns after earnings, identify a pair with the highest correlation, and implement the relevant trade. For instance, if 1D and 5D demonstrate the highest correlation, a trader can opt to position themselves “long” for the ensuing 5 days if the 1D post-earnings return is positive. Below is correlation data based on a 5-year and 3-year (more recent) review. Note that the correlation 1D_5D pertains to the relationship between 1D post-earnings returns and subsequent 5D returns.

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