$AMZN · Schwab Network · 2026-10-29

But we are waiting for Amazon's results, and we believe once again that AWS cloud service revenue will be better than expected.

Well, in that context , what will Amazon have to say later today, James? They simply need to excel in the numbers of cloud computing services (AWS).

That would be great for Amazon's stock. It will also be very important for artificial intelligence trading. I believe it will be an additional building block in constructing this success. Yes, this capital expenditure was worth it .

Okay, in short, regarding the capitalist side, what are you looking forward to hearing from Amazon in this regard? Because they were also big spenders this year. Yes, they were, and I think that's important with the results.

I think the market has realized that we need to see a rise in return on investment to accept the fact that they may raise their expectations for capital spending.

Therefore, we expect the numbers in the cloud sector to be better than expected, just as happened with Alphabet, and as we saw in the numbers of Anthropic and some other companies that announced their results, and this will allow them to raise their expectations.

We expect them to raise their capital spending forecasts.

Let's take a look at Amazon's annual chart, because a lot depends on that report tonight, especially after what we've heard from Microsoft and Google Alphabet.

The stock has retreated from its summer highs, like many other stocks, as you can see here. Not too bad. Clearly, we are not at the lows we saw during the past year or so, but we are currently trading down 3.5% ahead of this important earnings report later today.

As Jim said, looking at capital expenditures and AWS figures, we know that they are two key indicators that usually move the stock.

Just show us an example of trading this stock. Hello Jim. An important report is expected. You know, when you look at AWS , Jim mentioned this, cloud growth, right ? Everyone is exceeding their expectations.

Therefore, they are expecting a growth rate of around 37-38% year-on-year , which is slightly better than the last quarter. But the unreported figures I hear about exceed 40%. I believe Wedbush predicted a 41% growth rate in the cloud.

Therefore, if the result comes in above 40%, that will be positive.

I mentioned capital spending. I think they expect to spend around $220 billion in fiscal year 2026. Will they increase this number or keep it stable? Keeping it stable and not raising it at this stage may be a positive thing.

The stock has fallen by about 12 to 13% from its all-time highs seen in August . The options market prices a daily move up or down by about $18.50 in either direction. That is, an increase or decrease of approximately 7.5%.

So, take that into consideration. Therefore, the strategy I looked at gives me a slightly longer timeframe. It's not just about betting on profits. I headed to the monthly options cycle on November 20th.

That is, 22 days until this option expires. So, even if you don't get the upward move you might want , if you look at a strategy like this, you have some time for the deal to develop.

Therefore, in the November 20th monthly options, we will buy an unbalanced or broken-winged "call butterfly" strategy upwards. Buying one call option contract at an execution price of 245.

This price is considered to be approximately at the current market price. Then we will sell two call options contracts at an execution price of 260. This is the level you expect the stock to reach.

Then buy one call option contract with an execution price of 265.

Essentially, you buy a $15 vertical call option and cover part of the cost by selling another $5 vertical call option at the same execution price of 260 where you expect the stock to hit.

You will pay a cost (deduction) of approximately $4.70. This is your risk. $470 per price difference, with maximum profit at or near the execution price of 260, which is just over a thousand dollars.

Your break-even point, if you pay $470 as a cost, will be $249.70 up in this deal. This falls within the range of one standard deviation priced by the options market.

Now, if the stock breaks above the 265 level upwards, the profitability will still be more than double, but you will lose a small portion of that profitability between the 260 and 265 levels while continuing to reduce the initial cost.

Therefore, instead of buying a vertical call option between 245 and 260, you cover part of the cost by implementing an options butterfly strategy or an upward broken-wing options butterfly.

What you don't want to happen is for the stock to stay in its current place around 245 or to go down . You want it to exceed the breakeven point of 249.70. And remember, you have 22 days at this center.

So, you have a little over 3 weeks for the deal to develop. However, you start to get that expansion as you get closer to the end date of this strategy.