A sell-off for Meta Platforms (META) cast a pall on first-quarter earnings season. Now attention turns to upcoming results for Amazon.com (AMZN) stock, as well as Super Micro Computer (SMCI) and Apple (AAPL).

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Amazon stock has come under selling pressure even though its profit is expected to more than double, but sellers have hit Super Micro hard ahead of its report.

A maker of artificial intelligence hardware, Super Micro has made it a habit of preannouncing strong results in recent quarters. Wall Street didn’t get a preliminary outlook from the company this time around, however. That’s raised concerns of a tepid first-quarter report, although Super Micro is showing growth on par with fellow AI stock Nvidia (NVDA).

Analysts polled by Zacks Investment Research expect Super Micro to report adjusted profit of $5.97 a year, up 266% year over year, with revenue up 220% to $4.11 billion. Super Micro reports Tuesday after the close.

Mild Pullback For Amazon Stock

Amazon’s pullback has been more orderly than Super Micro’s. Super Micro stock is more than 30% off its high; Amazon is only about 10% off its peak.

Amazon stock gapped up powerfully in early February after the company reported strong fourth-quarter results. Revenue growth accelerated from the third quarter, rising 14% to $170 billion. Further, ad revenue grew 27% to $14.7 billion. In January, Amazon starting showing ads on Prime Video.

Revenue at Amazon Web Services, the company’s cloud computing segment, increased 13% to $24.2 billion, making up 14% of total revenue. Web services growth accelerated slightly from the third quarter.

Earlier this year, Amazon abandoned plans to acquire iRobot (IRBT), which makes robot vacuums, for $1.4 billion due to intense scrutiny from European regulators.

For the first quarter, analysts are modeling adjusted profit of 82 cents a share, up 164% from the year-ago quarter. Revenue is expected to rise 12% to $142.5 billion.

Other high-profile technology names on the earnings calendar include Apple (AAPL) and Advanced Micro Devices (AMD). But sellers have been dictating the action in both stocks in recent weeks.

Apple has been trending lower since late January amid slowing iPhone demand. AMD, meanwhile, is more than 30% off its high despite strong annual earnings estimates. Full-year earnings are expected to increase 20% this year, with growth accelerating in 2025, up 68%.

Watching Two Leaderboard Stocks

It’s a busy week of earnings for top-performing asset managers in the IBD 50 such as Apollo Global Management (APO), Blue Owl Capital (OWL) and Ares Management (ARES).

How To Know It’s Time To Sell Your Favorite Stock

Apollo Global is also a member of Leaderboard and reports early Thursday along with Ares Management. Results from Blue Owl are due Wednesday after the close.

Apollo Global is less than 5% off its high with a relative strength line near highs, while Ares is near the top of a flat base with a 139.48 entry. Blue Owl Capital is holding support at its 50-day line as it stays in buy range from an 18.33 buy point.

Another member of Leaderboard, Generac (GNRC), reports Wednesday before the open. The company gets most of its renown for its power generators. But late last year, Generac made a minority investment in Wallbox (WBX), a provider of electric-vehicle charging and energy management solutions.

Generac has the look of a turnaround after posting earnings declines in 2022 and 2023. Analysts expect full-year earnings to increase 15% this year, with growth accelerating to 27% in 2025.

Generac initially cleared a 132.50 entry. Now it’s eyeing an alternate entry of 140.34 with an Accumulation/Distribution Rating of A+, the highest possible. The rating got help from several above-average volume price gains in recent weeks.

Other firms set to report earnings that still show technical strength include Quanta Services (PWR), Ingersoll-Rand (IR) and Flowserve (FLS).

Options Trading Strategy

A basic options trading strategy around earnings — using call options — allows you to buy a stock at a predetermined price without taking a lot of risk. Here’s how the option trading strategy works, and what a call-option trade recently looked like for Amazon stock.

First, identify top-rated stocks with a bullish chart. Some might be setting up in sound early-stage bases. Further, others already might have broken out and are getting support at their 10-week lines for the first time. And a few might be trading tightly near highs and refusing to give up much ground. Avoid extended stocks that are too far past proper entry points.

A call option is a bullish bet on a stock. Put options are bearish bets. One call option contract gives the holder the right to buy 100 shares of a stock at a specified price, known as the strike price.

Once you’ve identified a bullish setup in the earnings calendar, check strike prices with your online trading platform, or at cboe.com. Also, make sure the option is liquid, with a relatively tight spread between the bid and ask.

Look for a strike price just above the underlying stock price — that’s out of the money — and check the premium. Ideally, the premium should not exceed 4% of the underlying stock price at the time. In some cases, an in-the-money strike price is OK as long as the premium isn’t too expensive.

Choose an expiration date that fits your risk objective. But keep in mind that time is money in the options market. Near-term expiration dates will have cheaper premiums than those further out. Buying time in the options market comes at a higher cost.

Amazon Stock Option Trade

When Amazon stock traded around 173, a slightly out-of-the-money weekly call option with a 175 strike price and a May 3 expiration came with a premium of around $5.85 per share per contract. That was 3.4% of the underlying stock price at the time.

One contract gave the holder the right to buy 100 shares of Amazon at 175 per share. The most that could be lost was $585 — the amount paid for the 100-share contract. To break even, Amazon would need to rise to 180.85, factoring in the premium paid.

The expected move in the options market for Amazon stock, based on the at-the-money strike price of 172.50, is about 14 points up or down. That’s found by adding the at-the-money call premium and a put premium for the May 3 contract.

Follow Ken Shreve on X/Twitter @IBD_KShreve for more stock market analysis and insight.

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