(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — On February 4th of this year, Amazon (AMZN) was two days away from reporting its Q4 numbers and the stock was making all-time record highs. It was a roaring bull market, with AI-related stocks leading the way, and Amazon had just broken out above its 2021 highs in the prior year. The stock closed that day at $242 per share — a new record — and investors were incredibly confident. Unfortunately, this moment ended up being a short-term top. Amazon exceeded The Street’s expectations on both earnings and revenue, but their guidance for Q1 had fallen somewhat short. The stock began to drop the next day and never recovered, right into the teeth of President Trump’s tariff rhetoric and the eventual Liberation Day crash. What’s happened since is a 25% recovery in Amazon’s stock price, bringing us (almost) all the way back to where things were this winter. Sean’s got an earnings preview for you as the company reports Thursday after the bell. Then I’ll chime in with some risk management for investors. Best Stock Spotlight: Amazon.com Inc (AMZN) On the list since: 7/25/2025. Sean — Amazon is the fourth-largest holding in the S & P 500 at a 4% weighting. The market cap sits at about $2.4 trillion. The largest AMZN has ever been was $2.56 trillion in February of this year. Even though the company is the 4th largest in the S & P 500, it’s nearly half the size of Nvidia (NVDA) with a market cap of $4 trillion. AMZNs revenue over the past 12 months is the second largest in the S & P 500. Their operating earnings are the 5th largest in the S & P 500. This is a systematically important stock for the market, and they report earnings Thursday after the close. Looking back at AMZNs two past reports, Q4 2024 and Q1 2025 had 10% and 9% year-over-year revenue growth. Operating income for those two quarters year-over year was up 61% and 20% respectively. From Q1 of 2020 through Q1 2025, AMZN grew earnings at a 28.2% CAGR. Over that same period, AMZN stock price grew at a CAGR of 15.6% per year. Earnings have been growing faster than its stock price. As most investors know, Amazon’s cloud computing business, Amazon Web Services or AWS, is and has been the most important part of the story. Despite being only 17% of Amazon’s revenue, AWS is 59% of its operating income. AWS’s operating margins are 38%, 6x higher than Amazon’s retail business in North America at a 6.5% margin. In addition to being a highly profitable segment, it’s also stable and predictable. As of Q1 2025, Amazon Web Services (AWS) has a backlog of about $189 billion, reflecting the total value of long-term customer commitments for its cloud services. This backlog carries a weighted average remaining contract life of 4.1 years, giving AWS strong revenue visibility well into the future. The fact that backlog growth is outpacing current revenue growth suggests that customers are signing larger, longer-term deals—many of which are being driven by rising demand for AI infrastructure. Amazon noted that AI workloads are scaling so rapidly that its existing infrastructure can’t fully meet demand, which is contributing to the surge in bookings. Amazon does not provide specific guidance for AWS, but from Q1’s report, AWS was having capacity issues: “I think we could be driving — we could be helping more customers driving more revenue for the business if we had more capacity” according to CEO Andy Jassy. Amazon plans to bring on “an increasing amount of capacity in the back half of the year” with the lion’s share of their $24.3 billion Q1 capex supporting technology infrastructure, primarily for AWS to meet AI services demand. Thursday evening, Amazon expects $162 billion in revenue, $16.8B in EBIT, and $1.32 in EPS, representing year-over-year growth of 9.5%, 14.8%, and 4.4% respectively (data via Quartr). Amazon’s report tonight will show whether its earnings growth and AWS strength can keep driving the stock, and the market as a whole. Risk management Josh — I’m showing you two highlighted sections in the chart below as we head into earnings. The price action gives me confidence that Amazon will have executed during the quarter and we should get a good reaction to the report. On the left, I’m showing you the massive 8% gap higher for AMZN when the president and China announced a 90-day truce and a rollback to significantly lower levels of tariffs than what had been threatened before. Amazon’s gap higher that morning was the largest among all of the Magnificent 7 companies. This is your clue that Amazon’s stock had been mostly held down due to fears of Chinese trade as opposed to anything structural or fundamental about how the business is running. Once it became likely to Wall Street that we’d find a solution between the two trading partners, this stock absolutely launched. Directionally, the talks between the U.S. and China in Stockholm this week seemed to have been productive. Whether or not this continues is probably the biggest ongoing catalyst or risk factor outside of earnings. The other highlight I’m showing you is the golden cross that took place earlier this summer, as Amazon’s short-term moving average (50-day simple moving average) crossed above its intermediate term one (200-day simple moving average). A golden cross is typically seen by technicians as extremely positive – especially when both moving averages are rising. It usually means the stock is under institutional accumulation and that the accumulation has been accelerating. I am currently long the name and will probably not react to a negative print, so long as guidance for the second half of the year remains intact. Amazon has a longstanding habit of not catering to the analyst community with a token penny-per-share beat and I have always respected that. Unfortunately, this can mean a knee-jerk reaction from the algorithms if the headline doesn’t perfectly match the expected “print.” If you’re not yet long and for some reason the stock sells back down to that rising 200-day just above 200, I would jump all over it. A reversal of the moving average crossover accompanied by disappointing guidance might be a good reason to exit for more risk-averse investors. DISCLOSURES: Josh owns the stock as noted above. 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