Weekly Equities Outlook: Amazon, Alphabet and Lloyds

Amazon Q3 earnings preview

Amazon is due to report earnings on Thursday, October 29, after the market close. These earnings come as the share price trades around $230, roughly 9% higher year-to-date.

The stock has fallen 2.5% over the past week as worries over huge AI spending have unnerved investors.

Expectations are for EPS of $1.96 a share, marking 0.4% annual growth, on revenue of $202.21 billion, up 12% year-on-year.

Amazon Web Services remains a key focus as the primary profit engine, with investors looking for continued momentum after it recorded 37% growth in the previous quarter.

Capex spending is guided at $220 billion, lifted by $20 billion in July owing to higher memory chip prices rather than added capacity. Reaching that level requires around $61 billion a quarter in the second half. A sixth straight increase wouldn't be surprising, with the market looking to see whether this spending buys capacity or simply adds to costs.

Free cash flow is slightly negative. This is an area the market will continue monitoring after negative free cash flow from Tesla and Meta last week sent their share prices lower.

Amazon's guidance is for $22.5 billion–$26.5 billion in operating income on $197 billion–$202 billion in sales. Operating income has beaten the top of the range in each of the last eight quarters.

The market will be laser-focused on evidence of a return on AI investment. It all comes down to what $220 billion in capex is buying Amazon: future earning power.

With regard to e-commerce, Amazon is expected to continue taking share from bricks-and-mortar retailers, while gaining further ground online. Amazon Prime membership also helps attract and retain customers who spend more with Amazon, reinforcing the network effect while bringing in recurring revenue.

High-margin advertising is expected to grow quickly, which could continue to boost profitability.

How to trade AMZN earnings

Amazon continues to trade above its rising trend line dating back to 2023, as well as its 200 and 50 EMA.

The price rose to a record high of 287.20 before easing back. However, it remains above the 50 EMA, keeping the outlook constructive, although momentum is showing signs of weakening, with the RSI at 50.

Buyers will look to extend gains above 265, the October high, with attention then turning to 277, the May high, and 287, the record high.

On the downside, immediate support is seen at the 50 EMA at 242. A break below here opens the door to 225, the July low, before attention turns to 215, the rising trend line support.

Alphabet Q3 earnings preview

Alphabet will report Q3 earnings on October 28 after the market close.

Expectations are for EPS of $2.98, up 2.4%, on revenue of $24.8 billion, up 82%, while operating margin is expected at 35%.

The results come as Google shares are unchanged YTD, notably underperforming the S&P 500's 11% gain. This underperformance comes as its AI investments have strengthened its competitive position and fuelled growth across Google Search, YouTube and Google Cloud, but as the market also grows increasingly concerned over the huge AI investment.

Alphabet's ability to integrate AI into search and its Gemini ecosystem has helped address concerns that emerging AI rivals could undermine its core advertising business. Expanding cloud profitability, a resilient advertising business and strong demand for AI services have reinforced investor confidence.

However, rising AI infrastructure spending remains a key risk, and one that investors are focused on, as we saw in the sell-off in Meta last week. Should the market conclude that AI spending is too heavy and is not delivering strong results quickly enough, pressure on major tech stocks could continue.

How to trade GOOGL earnings

Alphabet rallied to a record high of 404 before turning lower, breaking below the rising trend line dating back to April 2025 and testing the 250 EMA at 320.

Sellers will look to break below this level to spark a deeper sell-off towards 273, the 2026 low. From here, attention turns to the 200 EMA.

Should the 50-week EMA hold, buyers will look to rise above 350, the rising trend line resistance, and the October closing high to turn attention towards 380, the August high, ahead of 404 and fresh record levels.

Lloyds Q3 earnings preview

Lloyds reports on October 29 ahead of the market open and a day after the UK Budget, which could also be a key driver for the banks.

Chancellor John Healey is weighing up whether to hike taxes on banks, which have benefited from rising gilt yields and a higher interest-rate environment. Higher interest rates can lift net interest income, the difference between the interest a bank earns on lending and the interest it pays on deposits and other funding.

As a reminder, Lloyds' last report showed that most of its business performed well in the first half of the year. Its underlying loans and advances to customers rose by £10.4 billion to £491.5 billion in the first half. Customer deposits rose to £500.9 billion, driven by the commercial segment.

The firm also boosted its forward guidance, expecting underlying net interest income for the year to exceed £14.9 billion, with return on tangible equity rising above 16%.

However, a key downside risk is competition for customer deposits, which could erode lending margins. Lloyds' high loan-to-deposit ratio limits its flexibility relative to some peers.

Meanwhile, persistent inflation and higher mortgage refinancing costs are putting pressure on household disposable incomes. With the housing market showing signs of losing momentum, this could be an area to watch.

Total UK mortgage approvals continue to fall, down 16% year-on-year, as current financial conditions point to higher mortgage rates. This could slow demand for lending, although management has so far described consumer credit performance as resilient.

The FCA's motor finance redress process remains a potential source of additional costs. Investors will be looking for clarity on provisions and the impact, as an increase could weigh on earnings and capital returns.

How to trade LLOY earnings

Lloyds rose to a record high above 116.50 before turning lower, breaking below the rising trend line and testing the 50-week EMA.

With the RSI below 50, sellers will look to break below support, turning attention towards 90, the May low. A break below here could open the door to 84, the March low.

On the upside, should support hold, buyers will look to rise above 90 and 104, the rising trend line resistance. A break above here would bring 110, the 20 February high, back into focus, before attention turns to 116 and fresh record levels.