Amazon margins are earnings key as tech needs more good news
The worst month in nearly a decade for tech stocks has investors paying extra attention to Amazon's third-quarter earnings report on Thursday.
Amazon is the second-best performing megacap tech stock this year, with a 48 percent gain that trails only Netflix. While the web retailing giant is expected to say that revenue grew 30 percent from the year-earlier period, Wall Street is more focused on the profitability of key businesses including cloud computing, advertising and third-party retailing.
"The highest-margin businesses are simply growing so fast that Amazon is either not able or not willing to reinvest enough to offset the margin expansion," Macquarie analyst Benjamin Schachter wrote in a research note.
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