Amazon, the last of FANG, reports earnings Thursday. Here's how to trade it

The main event on the earnings calendar right now is Amazon's report, due out after the bell on Thursday. I'm watching several key components of its report.

The revelation that the company now has 100 million Amazon Prime members globally was a huge boost for the stock last week, but traders will now want to know how Amazon Web Services is performing.

The platform is indeed the dominant cloud provider; the critical question for investors to consider will be whether it has enough pricing power to absorb the increase in labor costs related to addressing security flaw vulnerabilities.

It was reported earlier this month that Netflix was testing the waters in moving to the Google cloud from AWS. This could certainly be a factor to consider if AWS growth slows.

Additionally, any comments related to possible repricing of its contract with the U.S. Postal Service could also rattle the market.

At this point, as Amazon's stock is up 60 percent in the last year and trading above $1,450 per share, it's certainly priced for perfection. Any small miss would no doubt cause a fast, furious sell-off.

But I'm of the belief that Amazon is the blue chip of the 21st century, as close to a Warren Buffett "moat" as we are likely to get, so any sharp dip would be a buying opportunity.

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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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