Amazon Earnings to Bring More Scrutiny For AI-Tethered Stocks Inc.’s “show-me” moment will arrive on Tuesday when its earnings become the latest litmus test on appetite for heavy artificial intelligence spending.

The message so far from investors: shares of firms that demonstrate progress in monetizing AI will be rewarded, while firms that don’t will see their stock price punished.

Last week’s misfire by Meta Platforms Inc. triggered a roughly $400 billion selloff in tech stocks amid concerns about the benefits of heavy spending on artificial intelligence. Later results from Alphabet Inc. and Microsoft Corp. eased those fears.

When Amazon reports, scrutiny will be on its web services segment, where it uses generative AI. Options traders are pricing in a move of nearly 8% in either direction for the stock a day after the report, according to data compiled by Bloomberg.

“It’s all about AWS, how much they’re maintaining market share and then what they’re doing in AI to increase the bottom line,” said Paul Marino of GraniteShares.

“Amazon has an incredibly steady retail business and that’s all great and they’re a dominant player — but none of that means anything if what they’re doing in the cloud, and what they’re going to do with AI, doesn’t bear fruit.”