Should You Buy Amazon Stock Before Oct. 30?

Shares of Amazon (NASDAQ: AMZN) have been a poor performer this year, roughly flat as of this writing while the S&P 500 is up about 14%. There are several reasons the market is wary today, including the potential effects of tariffs and a possible slowdown in Amazon Web Services (AWS).

Investors are going to get a big update when Amazon reports earnings on Oct. 30. Should you buy the stock before the report? Here are a few possible scenarios for what management's update will look like.

Image source: Amazon.

E-commerce: Are tariffs having an impact?

Although investors are focused on the company's artificial intelligence (AI) business today, e-commerce is still at its core, accounting for about two-thirds of total sales, or more than $100 billion in the 2025 second quarter.

Sales growth was fairly strong in the second quarter, with both online stores and third-party sales up 11% year over year. Management made several inroads in the quarter, including expanding same-day or next-day delivery to 4,000 smaller regions and adding new brand names like Estée Lauder's Origins cosmetics line and creating a specialized Nike storefront.

As fast as e-commerce is today, Amazon continues to make meaningful strides in becoming even faster -- and cheaper, too. The company has been working on inbound channels to its regional distribution centers, and in the second quarter, it increased the amount of orders that go straight from fulfillment to delivery without extra stops by 40% year over year. Since more products are now closer to more customers, distance traveled per package declined 12% on average, and it reduced handling touches per unit by almost 15%.

CEO Andy Jassy said that the actions the company is taking are making the entire distribution system more efficient, and investors should look out for faster, more efficient delivery times in the third quarter that should also go toward improving margins. However, Jassy has said that there's still plenty of uncertainty in how tariffs will impact the business.

AWS: The future is AI

Some investors have soured on AWS, since percentage-wise, it's not growing as fast as some of its competitors, with sales up 17.5% year over year in the second quarter. But it's also a lot bigger than any other cloud services provider, so it's not necessarily a fair comparison.

The recent AWS outage underscores how much of the internet relies on its services, which demonstrates its power.

AWS is also the home of Amazon's AI business, which is growing like wildfire. As of the second quarter, it has a $123 billion annualized run rate, and the company is betting on it in a big way.

"We will continue to invest more capital in chips, data centers, and power to pursue this unusually large opportunity that we have in generative AI," Jassy said.

Focus on the long term

Management is guiding for sales to come in at between $174 billion and $179.5 billion, or a 10% to 13% increase year over year, and operating income of $15.5 billion to $20.5 billion, as compared with $17.4 billion last year. Wall Street analysts expect earnings per share of $1.56, up from $1.43 last year, and $177.7 billion in revenue.

In general, the market won't be happy unless Amazon comes in at the high ends of its guidance, but there are many factors that will impact how the market responds to the earnings release. These include specific updates about the business, and the market's reaction often reflects guidance for the upcoming quarter and full year.

There are reasons to be optimistic about the company's third-quarter results as tariffs stabilize somewhat, and management is likely to have positive news about progress in AI.

The stock is also trading at a discount to historical averages, giving it room to expand with good news. At its recent price, Amazon trades at 29 times forward one-year earnings.

Regardless of what happens on Oct. 30, this is an attractive entry point for new investors for a stock with excellent long-term prospects, and now is a good time to buy.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Nike. The Motley Fool has a disclosure policy.