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Amazon is going much higher after earnings: Expert

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Amazon shares have been on a tear this year, up more than 80 percent while the S&P 500 is down nearly 2 percent in the same period. According to one top analyst, the stock could surge even higher following its earnings report Thursday after the closing bell.

"We continue to like Amazon stock," RBC's Mark Mahaney said Wednesday on CNBC's "Fast Money." Mahaney's firm has a $705 price target on Amazon, 25 percent higher than the current stock price of around $555 a share. "We think on a modest beat quarter the stock can continue to move higher."

Amazon stock has had major 10 percent moves after the last three reports, but Mahaney said he is not expecting that again. "We're not looking for that kind of move this quarter, but we like the thesis long-term," he said.

A number of factors will play into the results, as analysts are expecting $25 billion in revenue and loss per share of about 14 cents. "We think amazon can meet those numbers and maybe show a little bit of upside on the earnings side," said Mahaney.

Peeling back the layers on the report, Mahaney is also watching for the contribution from Amazon Web Services and North American Retail. He's also paying close attention to the margins, which the street is expecting to be at a record high of 5.2 percent for operating margins, which he worries could be too optimistic.

According to a recent survey by RBC, Amazon dominates the U.S. online retail landscape with 90 percent of respondents saying they use the site most often when it comes to online ordering, eBay was No. 2 and was No. 3. The survey also found that adoption of its prime membership is up to 40 percent out of all Amazon customers.

Thursday will prove to be huge for tech Alphabet and Microsoft also report earnings. With Amazon, the three companies make up 21 percent of the Nasdaq 100.