Amazon is gearing up to release its first-quarter earnings report after a strong start to the year. Despite a recent pullback, the e-commerce and cloud-computing giant's stock has been performing well. Analysts will closely examine several key factors, including the growth of Amazon Web Services (AWS), the company's advertising business, and the potential for dividends.

According to FactSet, Amazon is expected to report a 12% year-over-year increase in sales for the March quarter, amounting to $142.65 billion. Analysts predict a significant rise in earnings per share, projecting a growth of 170% to 84 cents per share. Operating income is anticipated to be $11.2 billion, a 135% increase compared to the same period last year.

AWS, a crucial contributor to Amazon's profits, will be under scrutiny. The cloud division is expected to show accelerated sales growth for the second consecutive quarter. Analysts estimate a 15% year-over-year sales increase, translating to $24.56 billion in revenue. Both Microsoft and Google, Amazon's cloud competitors, reported robust cloud sales growth in their recent earnings reports, attributing it to demand for artificial intelligence and overall stronger cloud demand.

Another area of focus will be Amazon's advertising business, which has experienced rapid growth in recent quarters. FactSet projects a 23.5% year-over-year increase in advertising sales, reaching $11.74 billion. Amazon's foray into selling commercials on its Prime Video service adds another dynamic to its advertising revenue stream.

Investors will also be on the lookout for any updates on Amazon's capital expenditures (capex) and dividend speculations. As cloud providers invest heavily in expanding their AI capabilities, increased capex costs are expected. Similarly, dividend speculation arises after Meta (formerly Facebook) and Google introduced dividends this year. While the chances of an Amazon dividend seem unlikely, analysts suggest the company could increase its share buyback authorization with ample available funds.

Amazon's stock has seen some fluctuations recently, with a slight pullback from its all-time high on April 11. However, it remains up by approximately 18% since the start of the year. The stock's Relative Strength Rating is 91 out of 99, indicating its outperformance compared to most of the market over the past year. Additionally, Amazon holds an impressive Composite Rating of 95 out of 99, placing it ahead of 94% of other stocks in terms of key performance metrics and technical strength.

With the anticipation of positive earnings, analysts have a bullish outlook on Amazon stock. UBS analyst Stephen Ju rates Amazon as a buy, with a target price of 215, up from a previous target of 198. He expects the company's e-commerce business to accelerate this year, driven by improved service levels, including expanded availability of one-day and same-day Prime delivery.

In a related update, Amazon announced that 60% of its Prime deliveries in the 60 largest U.S. metro areas were fulfilled on the same day or the next day, highlighting the company's commitment to quick and efficient delivery for its Prime members.

Overall, Amazon's Q1 earnings report is highly anticipated, with investors and analysts eager to assess the performance of AWS, advertising revenue, capex costs, and the potential for dividends.