After the first of the "FANG" quartet surged last week on a strong quarterly earnings report, some strategists are forecasting further upside for another member of the FANG gang reporting this week: Amazon.
Netflix handily beat its earnings expectations and membership forecasts when it reported earnings last Monday, pushing the stock to all-time highs. Amazon is poised to see a similar surge after its earnings report on Thursday, said David Seaburg, head of sales trading at Cowen and Co.
"I'm pounding the table on Amazon, there's no question about it. They are going to report a good quarter, Street numbers are going to go higher, and I think the stock is going to soar. I think it could be a 6 percent move, so I look at it and say it's easily a nice long trade into the quarter, into earnings next week," Seaburg said Thursday on CNBC's "Trading Nation."
He argued that Amazon's stock, up more than 36 percent this year and surpassing $1,000 a share, is seeing a similar setup to that of Netflix before its blowout earnings report. The streaming service had already "hit 40 percent of what they had talked about, from a net subscriber projection, in the first three weeks of the quarter," he said.
Amazon is set to blow past expectations in a similar fashion, Seaburg says.
"You look at their Street numbers, as far as their operating income numbers, they're incredibly low. I think they're looking for $550 million, which implies a 1.5 percent operating margin. ... If you look back 10 years, I don't think it's been that low," he added. Furthermore, the company will likely see reduced spending in the second half of this year after spending a significant amount on content in the second half of last year, and adding fulfillment centers.
Shares of Amazon rose nearly 5 percent in after-hours trading following its last quarterly earnings report, in April.
Wall Street analysts on average give the now-$1,025 stock a price target of $1,136.71, according to FactSet estimates. Forecasts are going to have to be "ratcheted up," Seaburg projected, and the stock will in time surpass the $1,100 mark.
At this juncture, investors had been ditching shares of another technology giant, Apple, to buy shares of some FANG stocks, observed Miller Tabak equity strategist Matt Maley.
"Let's face it. Apple still generates huge amounts of cash, and I just wonder if we will get a 'buy the news' situation, either when earnings come out or when they announce the iPhone 8, and see if they can break out," Maley said Thursday on "Trading Nation."
CNBC's Jim Cramer coined the FANG term for Facebook, Amazon, Netflix and Google parent Alphabet. The four individual stocks tumbled in early June along with other technology names as the market grew anxious about a bubble formation but recovered from their declines shortly thereafter.