Amazon Q4 Earnings Preview

Lot’s of names reporting soon, but Amazon is my largest holding and I wanted to discuss it more in-depth and what I’m thinking for this quarter and the quarters ahead. There’s only a week left till their earnings to I wanted to get this out well before. I’m going to post about the risks to the upside and downside, the valuation, the price action relative to peers, the options flows, go over every segment and discuss more about how I’m playing it very aggressively with a calendar spread.

Why Amazon?

My fascination with Amazon stems from years of focusing on it through work along with the fact that in my opinion Amazon is the most important company in the world. Think about the company itself, they employ 1.5M workers. After the US Government and Walmart, nobody employs more people than Amazon. It doesn’t stop there, look at all these Amazon sellers. The big sellers have huge operations that employ countless other people and for many, they live and die by what happens on Amazon. It could be argued that more people depend on Amazon to make a living than any entity in the world.

Aside from that, Amazon is the most interesting company to me because of all the things they do, all the money they spend building things, real things, and not doing buybacks like the rest, but I think a change may be on the horizon. I’ll discuss that later. While most companies play the quarter to quarter game of trying to boost the stock price, Amazon has always focused on building far out into the future to drive future growth. Even this past year when Apple posted 4 straight quarters of revenue decline, Amazon kept chugging along with solid revenue growth at massive scale because they spent years building.

What Could Wrong?