$Amazon(AMZN.US) My first reaction upon seeing the billboard was: Amazon is in the piglet business? How come I didn't know? 😂

Without further ado, here are the key points to watch for in tomorrow's Amazon earnings report, which could cause significant volatility:

Core metrics: AWS growth rate and profit margin, advertising revenue growth rate, Q2 guidance. Overall retail growth has minimal impact and can be ignored.

1. AWS (Impact Weight: ⭐⭐⭐⭐⭐ Highest)

• Key focus: YoY growth rate + operating profit margin

◦ Expectation: 26%–28%, Q4 was 24%, acceleration is key.

◦ Profit margin: 35%+ is healthy; below 33%, market reaction depends on interpretation.

◦ AI revenue: $15B+ annualized, whether growth is triple-digit; revenue from and share of in-house chips (Trainium/Inferentia).

◦ Orders & customers: Progress on Anthropic partnership, conversion of 100k+ Claude customers, YoY growth of backlog.

• Potential stock reaction: >28% and margin 35%+ → big rally; <24% or margin decline → big drop.

2. Advertising Business (Impact Weight: ⭐⭐⭐⭐⭐ High)

• Key focus: YoY growth rate + gross margin

◦ Expectation: 22%–25% (Q4 was 23%), the third-largest digital ad platform in the US.

◦ Gross margin: Significantly higher than retail (40%+), directly lifts overall profitability.

◦ Incremental drivers: Full rollout of Prime Video ad tier, commercialization results of AI ad tools (Ads Agent).

• Stock reaction: >25% → strong catalyst; <20% → valuation pressure.

I've already prepared some funds. If given the chance, I'm ready to buy more Amazon shares. 🤪