Back to top

Image: Bigstock

Buy Amazon and Netflix Stock Ahead of Q3 Earnings?

Read MoreHide Full Article



On today’s episode of Full Court Finance at Zacks, Ben Rains dives into the broader market as the third quarter earnings season starts to heat up. The episode then explores both Netflix (NFLX - Free Report) and Amazon (AMZN - Free Report) stock ahead of their upcoming financial releases to help investors decide if either tech stock is worth buying at the moment.

The market posted its best week in months last week and followed that up with another strong showing on Monday. The S&P 500 now up over 4% in the last month, as it regains momentum from its early September drop. The positivity comes as Wall Street grows more hopeful about a second stimulus bill, and analysts look to the possibility of a more decisive victory in the presidential election.

The recent climb also suggests that investors are likely expecting improving third quarter earnings results, which the most recent Zacks estimates support. And the market won’t have to wait long for more clarity on Q3 and what’s next, as the big banks such as JPMorgan (JPM - Free Report) and Citi (C - Free Report) helped kick off the busy part of the earnings season on Tuesday morning.

Next week, the big names in tech start to report their quarterly results. This includes the likes of Intel (INTC - Free Report) , Tesla (TSLA - Free Report) , and of course Netflix and Amazon.

Netflix added roughly 26 million paid subscribers during the first two quarters of FY20, or just 10% less than it pulled in all of 2019. The coronavirus has also created a unique situation for streaming TV firms, as movie theaters, concerts, and crowded live sporting events are likely to be some of the last things to return to normal.

The largest streaming TV firm in the world does face competition from newcomers such as Disney+ (DIS - Free Report) and Apple TV+ (AAPL - Free Report) , as well as HBO Max (T - Free Report) , Amazon Prime, and others. Yet despite the crowded market, Netflix is poised to grow for years to come in what seems likely to be the future of entertainment.

Amazon, which is also projected to report its quarterly results next week, has benefitted from the social distancing environment, alongside everyone from Zoom Video (ZM - Free Report) to Target (TGT - Free Report) . The e-commerce and cloud computing powerhouse is built to thrive during the current market conditions and it is set up for continued expansion in a range of growth areas.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot stocks we're targeting >>