To The Moon

Post-Earnings Setup: Amazon (AMZN) Amazon’s Q2 earnings beat expectations on revenue and profits, but the stock slid 8% due to weaker profit guidance and underwhelming AWS growth.

We have seen $Amazon.com(AMZN)$ recover and back above $220 level with a 0.37% gain on Thursday (07 Aug).

In this article, I would like to share how an investor might approach it tactically for a post earnings trade setup.

Tactical Plays After Earnings

AI Infrastructure Convexity: Amazon raised its 2025 capex forecast to $118B, with a heavy tilt toward AI infrastructure. Investors could lean into this by tracking suppliers (e.g., data center REITs, chipmakers) or thematic ETFs exposed to cloud and AI buildouts.

AWS vs. Azure/Google Cloud: AWS grew 18% YoY, but lagged rivals. If you expect AWS to regain momentum, consider barbell exposure: overweight AMZN while hedging with cloud competitors or infrastructure ETFs.

Retail & Advertising Strength: Retail growth was steady, and ad revenue jumped 23%. This could support a short-term bounce. Options traders might explore short-dated call spreads or delta-neutral straddles to capture volatility.

What Is Coming in August

Great Freedom Festival (India): Amazon kicks off its annual sale on August 1, featuring deep discounts across electronics, appliances, and fashion. Prime members get early access, and SBI cardholders receive up to 10% off.

Alexa+ Monetization: The upgraded AI assistant ($19.99/month or free for Prime) is expanding. Watch for subscriber metrics and engagement data—this could be a new monetization lever.

AI Agent Rollouts: Amazon is scaling tools like DeepFleet (robot logistics), Kiro (agentic IDE), and Bedrock AgentCore. These could drive operational efficiency and long-term margin expansion.

In the next section, we will fuse Amazon's post-earnings dynamics into a macro-responsive rotation dashboard and explore how varying AWS trajectories ripple across exposures.

Amazon-Centric Rotation Dashboard (Aug 2025 Macro Layered)

Return Cone Simulation: AWS Growth Scenarios (Q3–Q4 2025)

Scenario A: AWS Accelerates to 22–25% YoY

• AMZN: Projected +18–24% through Q4, driven by margin optimism and infra capex convexity.

• AI Infra ETFs (e.g., IRBO, BLOK): +15–18%, fueled by hyperscaler expansion.

• Competitor Dispersion (GOOGL/MSFT): Flat to +6%, hedge neutral.

• Strategy: Long AMZN + Infra barbell, delta hedge via GOOGL straddle.

Scenario B: AWS Maintains 17–18% YoY Growth

• AMZN: +6–10%, modest follow-through on capex theme.

• Infra ETFs: +4–6%, subdued rotation.

• Retail Sleeve: Tactical bounce on global sales (e.g., India event).

• Strategy: Barbell AMZN + $Costco(COST)$, layer in ad monetization.

Scenario C: AWS Decelerates to 14–15% YoY

• AMZN: -3% to +2%, pricing in margin compression.

• Cloud Competitors: Mild outperformance, rotational bid.

• Infra Plays: Flat to down, as capex narrative weakens.

• Strategy: Hedge AMZN with $Alphabet(GOOGL)$ /NET, tilt toward Retail sleeve.

Now in the next section we will craft a structured visualization of the return cone bands for Amazon and its related exposures across three AWS growth scenarios, then unpack how AI infrastructure capex convexity plays into multi-sleeve portfolio dynamics.

Amazon Ecosystem: Return Cone Bands (Q3–Q4 2025)

These bands illustrate potential return trajectories for key exposures under different AWS growth outcomes. Assumptions are scenario-weighted with implied volatility overlays and macro rotation shifts.

Simulation Matrix

Convexity Layers: AI Infrastructure Expansion Themes

These layers explore how Amazon’s increased $118B 2025 capex—heavily tilted toward AI infra—creates non-linear upside potential across exposures.

Convexity Drivers & Transmission Mechanisms

• Capex Spillover Convexity Theme: Rising investment in Bedrock, Trainium, and data centers Effect: Margins scale disproportionately as infra costs amortize → benefits AWS + vendors Tactics: Long AMZN and NVDA/SMCI with vol collars

• Agentic Workflows Multipliers Theme: Tools like Kiro IDE and DeepFleet increase developer velocity + logistics efficiency Effect: AWS use-case breadth expands → convex top-line growth Tactics: Pair AMZN with exposure to SNOW, DDOG (customer layer)

Infra Stack Rotation

• Theme: Buildout accelerates adoption across Layer 1–Layer 4 infra stack

• Effect: ETFs like BLOK and IRBO get bid via thematic rebalancing

• Tactics: Option ladder across thematic ETFs + AMZN bull put spreads

In order for us to understand better, here is a precision-tuned matrix that layers macro trigger responsiveness—VIX, CPI, and FedSpeak—into rebalancing tilts across barbell sleeves, tailored for Amazon-centric plays and thematic allocations into Q3–Q4 2025.

Macro-Triggered Scenario Rebalancing Matrix

Tactical Rebalancing Ratios (Sleeve Adjustment Table)

Final Note

If you find that using the barbell strategy might be too complex, there is actually quite a good option approach to trade AMZN, I have an existing contract which expire on 12 Sep 2025 which was brought after the earnings.

Summary

Despite an initial dip following its earnings report, Amazon (AMZN) has strong potential for a bullish trade in August. The market's initial reaction was driven by a cautious Q3 operating income outlook, stemming from heavy investments in AI infrastructure for its cloud business, AWS. However, a closer look reveals that the company's core businesses are performing exceptionally well.

Amazon's Q2 revenue and EPS significantly beat analyst expectations. Its e-commerce and advertising segments are showing accelerated growth, and AWS revenue continues to expand, even if its growth rate is currently behind some competitors. Many analysts view the stock's recent pullback as a buying opportunity, arguing that the company's substantial capital expenditures in AI are necessary long-term investments that will ultimately fuel future growth and maintain its market leadership. The stock's valuation is also considered historically attractive.

Appreciate if you could share your thoughts in the comment section whether you think Amazon still have the potential for a bullish trade which we can deploy a Bull Put strategy to get it.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.